State Of Gujarat Vs Ambuja Cement Ltd (Supreme Court of India)
Supreme Court held that the Purchase Price as defined u/s. 2(18) of the Gujarat Value Added Tax Act, 2003 would not include purchases on which no value added tax was claimed nor granted.
Facts- The Appellant herein is the State of Gujarat which has challenged the judgment passed by the High Court of Gujarat dated 28.04.2016 in an appeal preferred by it which was dismissed affirming the order dated 08.06.2015 of the Gujarat Value Added Tax Tribunal Ahmedabad, allowing the appeal of Respondent M/s Ambuja Cement, Ltd.
The plea taken by the Appellant while challenging the judgments of the High Court and the Tribunal is that the Courts below have erred in holding that Value Added Tax and value of purchases on which no tax credit was claimed nor granted in the assessment, cannot be included in the aggregate of taxable turnover of purchases within the State for the purpose of reduction of tax credit u/s. 11(3) (b) of the Gujarat Value Added Tax Act, 2003 (GVAT Act).
Conclusion- The cogent reading of sub-Section (18) of Section 2 which defines ‘purchase price’, sub-Section 32 of Section 2 which defines ‘turnover of purchases’, and Section 11 of the GVAT Act which deals with entitlement to the tax credit, would lead to only one conclusion, that the purchase price would not include purchases on which no value added tax was claimed nor granted and the component of value added tax stood already paid on purchases. Accordingly, the taxable turnover of purchases would have to be calculated after deducting both the components as has been detailed aforesaid.
