The Hon’ble Delhi High Court in the case of Hari Durga Travels v. Commissioner of Trade & Taxes has held that VAT not applicable on transfer of right to use of goods if effective control and possession are not transferred.

Under Section 81 of the Delhi Value Added Tax Act, 2004, appeal lies before the Hon’ble High Court from an order passed in Appeal by the Tribunal only if the case involves ‘a substantial question of law’.

The substantial question of law laid down before the Hon’ble High Court –

“Whether the agreement between the Appellant and Delhi Transport Corporation giving on hire two Deluxe buses for being plied as per requirement of the latter on the routes and as per schedule specified its transfer of right to use of goods so as to be liable to VAT under Section 2(zc)(vi) of DVAT Act?”

The substantial question of law is answered in the negative against the revenue. Consequently, the impugned order imposing tax liability and penalty set aside.

The copy of judgment is extracted with this post for your reference.

http://lobis.nic.in/dhc/RKG/judgement/13-05-2015/RKG14052015STA622014.pdf