M/s.D.B.Z.Real Estate India Pvt. Ltd.,

9th Floor, Hindustan Times House,

18-20, K.G.Marg,

New Delhi – 110 001.

ORDER

Present for the Applicant : Shri Ashwani Tripathi, Adv.

Present for the Department : Shri Nitya Nand, DR.

The above named applicant has filed this application u/s 84 of the Delhi Value Added Tax Act, 2004 (herein after referred to as the "said Act") and the questions put up before this Court for determination under the aforesaid provision of law is as under:

"Is the transfer of fixed assets covered under Section 2(f) and sales exempted from tax under Section 6 of the DVAT Act, 2004?"

2. The application for determination has been made in the prescribed format DVAT-42 and the requisite fee of Rs.500/- paid through Demand Draft No.916099 dated 17-04-08.

3. The facts as stated in the application are that the Applicant company is engaged in the real estate business providing consultancy and advisory services. The Company is not registered with the Department of Trade and Taxes. It is stated that the Company seeks to transfer their fixed assets ranging from furniture and fixtures, plant and machinery, networking equipments, software, telephone equipments, air-conditioners, home theater etc. to other company.

4. Shri Ashwani Tripathi, Advocate appeared and reiterated the contentions as raised in the application.

5. The D.R. pointed out that the issue raised in the instant application has been decided in the case of M/s.A.R.Airways (Pvt.) Ltd. vide order No.205/CDVAT/2008/205 dated 19.5.2008. The D.R. further pointed out that the fixed assets of the company are covered under Section 2(f) of the DVAT Act, 2004. As regards the sales/transfer of the fixed assets referred to above, being exempt under Section 6(3) of the DVAT Act, 2004, the D.R. referred to the said provisions, which are quoted as under :

"6. Sale exempt from tax:

(1) xxx xxx xxx

(2) xxx xxx xxx

(3) Where a dealer sells capital goods which he has used since the time of purchase exclusively for purposes other than making non-taxed sale of goods, and has not claimed a tax credit in respect of such capital goods under section 9, the sale of such capital goods shall be exempt from tax.

6. Referring to above provisions of sub-section (3) of Section 6 of the DVAT Act, 2004, the D.R. pointed out that the same are not applicable in the case of the Applicant. The Applicant has not used the capital goods exclusively for purposes other than making non-taxed sale of goods. Since capital goods in question have not been used exclusively for taxed sale of goods, the condition precedent for claiming exemption under sub-section (3) of Section 6 is conspicuous by its absence. Since the Applicant has not used the capital goods exclusively for purposes of taxed sale of goods, there is no question of the Applicant claiming any tax credit and therefore even the second condition for applicability of sub-section (3) of Section 6 is also not attracted.

7. The D.R. pointed out that the Applicant stands covered as a casual trader under Section 2(g), which is reproduced hereunder:

"(g) "casual trader" means a person who, whether as principal, agent or in any other capacity undertakes occasional transactions in the nature of business involving buying, selling, supply or distribution of goods or conducting any exhibition-cum-sale in Delhi whether for cash, deferred payment, commission, remuneration or other valuable consideration.

8. Section 3 of the Act is the charging Section and mandates that every dealer who is either a registered dealer or required to be registered under the Act shall be liable to pay tax calculated in accordance with this Act.

9. I have carefully considered the documents filed by the Applicant and heard both the parties. I am of the view that the exemption under sub-section (3) of Section 6 of the DVAT Act, 2004 is not attracted because both the conditions prescribed therein are conspicuous by their absence. The Applicant ought to pay tax on the sale of various goods referred to in the annexure to the application filed by the Applicant, as under the scheme of the Act there is no exemption available to it. The rate of tax on items which fall under Third Schedule to the DVAT Act, 2004 will be 4% and on the unspecified items at the rate of 12.5%.

Held accordingly.

(Archna Arora)

Commissioner (T&T)