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2016 (11) TMI 83 - HC - VAT and Sales TaxVires of Rule 3 (2) (b) (ii) of the Delhi Tax on Luxury Rules, 1996 - bifurcation of consolidated bill amount - principle contained in Section (3) (5) of the Act - luxury tax in respect of turnover of receipts for supply of food, drinks and goods such as cosmetics, medicines, nutritional supplements etc. on the sale of which the proprietor is liable to pay tax under the Delhi Value Added Tax Act, 2004 - Held that: - the revenue had suggested that there is a radical difference between the threshold required for luxury tax levy on the one hand and the DVAT levy on the other. This argument too has to fail. There is no doubt that in the present case, the thresholds are fulfilled. Furthermore, what is important is not the collection but the subjecting of the incidents of taxation. As long as the activity answers description provided by the legislature in the present instance of luxury, it would be subjected to tax. Equally, as long as there is a sale or transfer of goods or right to use the goods or other services which are purportedly a subject of VAT, that the dealer is subjected to actual levy and collection at a higher threshold is a matter of detail. The levy exists per se by legal definition. It is this aspect which is crucial rather than the existence of higher or lower threshold as is urged by the revenue - Rule 3 (2) (b) (ii) is ultra vires - appeal allowed - decided in favor of appellant.
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