Can a party argue that a grant it received under a contract does not make taxable supplies for consideration?

I note that in British Columbia Transit v. The Queen,[14] a GST case, the appellant was denied input tax credits on the basis that it did not make taxable supplies for consideration because certain grants it received under the contractual arrangements were not consideration. The appellant disputed this. Later, the appellant also took the position that certain property taxes paid on its behalf constituted consideration. The respondent took the position that because of subsection 306.1(1) the appellant was precluded from arguing the point.