Levy of VAT (tax) - Turnover of old machinery and equipment ...

Case Laws     VAT and Sales Tax

April 10, 2024

Levy of VAT (tax) - Turnover of old machinery and equipment after the closure of business - The central contention is the interpretation of the amended definition of "business" and the classification of the assets sold. The revisionist argues for a broader interpretation, encompassing all transactions related to goods acquired during business operation, while the respondent maintains that the assets sold are capital goods and thus exempt from taxation. - The High Court, after careful consideration, rules in favor of the respondent (assessee). It emphasizes that the amended definition of "business" restricts taxation to the sale of goods acquired during business operation, excluding transactions post-business closure. Additionally, the Court agrees with the lower authorities' classification of the assets sold as capital goods, affirming that they fall outside the taxable scope of the Act.

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