Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2017 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 299 - HC - VAT and Sales TaxSale of capital goods - car used as a demo car - exemption from tax - Section 6 (3) of the DVAT Act - Held that: - It makes no distinction whether the main business of the Assessee is dealing in cars or some other business in order for goods purchased in the Assessee's own name and used for the purposes of the Assessee's business to be treated as capital goods. The Assessee being a dealer selling new cars, it is but natural that the Assessee purchases some cars in its own name for use as demo cars. Prospective customers might like to ‘test drive’ or “inspect‟ the demo car before making an informed choice of purchasing the new car. The fact that these cars are purchased by the Assessee in its own name clearly indicates that the Assessee intends to use these cars as ‘demo cars’ and therefore, would be entitled to treat them as Assessee‟s capital goods. Such demo cars are used for the purchase of Assessee’s business. It must be noticed at this stage that VATO gave no reasons whatsoever for denying the benefit of exemption except saying that the case of the Appellant cannot be accepted. It is only a conclusion without any reasons. The Department has expressed an apprehension that the Appellant may be dressing up regular sales transactions as sale of capital goods for avalining the benefit under Section 6 (3) of the DVAT Act. The denial of benefit of that provision cannot be based on mere apprehensions and suspicions. The fact remains that the Department has been unable to produce any credible material to show that in selling any of the demo cars in either 2009-10 or 2010-11, the Appellant was seeking to camouflage regular sale transactions as sale of capital goods in order to claim the benefit under Section 6 (3) of the DVAT Act. Appeal allowed - decided in favor of appellant.
|