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2015 (4) TMI 35 - HC - VAT and Sales TaxApplicability of rate of tax on the sale of demo cars - Benefit of notification dated 25.10.2005 - When the authorities noticed that the claim is for demo cars and not used cars, the said claim was disallowed and tax was levied at 12.5% on the value of the cars sold - Held that:- dealer is in the business of selling cars manufactured by Maruthi Udyog Limited. The dealer is also in the business of purchase and sale of used cars. In respect of the purchase and sale of used cards, the dealer’s claim under the notification has been allowed. It is only in respect of the cars, which are purchased from the manufacturer, the said benefit is not extended. The reason is obvious. The purchase is not that of a used car. The purchase is that of a brand new car from the manufacturer. After purchase from the manufacturer, if the dealer instead of selling the same to a customer uses the said car for demonstration purpose and after some time sells the said car to a customer, it would not be a case of purchase of used car and sale of a used car. The benefit under the notification is meant only for purchase of used cars and sale of used cars. By mere use of the new car purchased from the manufacturer for the purpose of demonstration, the said car cannot be treated as a used car so as to attract the benefit under the notification. Therefore, the Tribunal has rightly held that the petitioner is not entitled for the benefit of the notification. We do not see any merit in these petitions. - Decided against assessee.
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