LexTHE STATE OF GUJARAT versus M/S AMBUJA CEMENT LTD.
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[2024] 8 S.C.R. 34 : 2024 INSC 572 The State of Gujarat v. M/s Ambuja Cement Ltd. (Civil Appeal No. 7874 of 2024) 02 August 2024 [Abhay S. Oka and Augustine George Masih,* JJ.] Issue for Consideration Definition of Purchase Price under sub-Section (18) of Section 2 of the Gujarat Value Added Tax Act, 2003. High Court whether justified in upholding the order passed by the Gujarat Value Added Tax Tribunal wherein it held that the tax and value purchases on which no tax was claimed nor was granted in the assessment could not be included in the aggregate of taxable turnover of purchases within the State of Gujarat for the purpose of reduction of tax credit. Headnotes† Gujarat Value Added Tax Act, 2003 – ss.2(18), (32), 11(3 (b) – Purchase Price – Turnover of purchases – Tax liability u/s.11(3 (b) – Entitlement to tax credit – Respondent-dealer excluded the amount representing Value Added Tax and value of purchases of which no credit was claimed, while calculating the taxable turnover of its purchases within the State of Gujarat and reduced the taxable turnover by four per cent on the quantity of goods involved in the manufacturing of goods dispatched by way of branch transfer – Correctness: Held: The calculation of taxable turnover of the purchases and reduction value of purchases on which no tax credit was claimed nor granted, and component of value added tax already paid on purchases, was rightly excluded from the total turnover of the Respondent-dealer while computing his tax liability u/s. 11(3 (b) – Cogent reading of s.2(18), s.2(32) and s.11 lead to only one conclusion that 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 – Thus, the taxable turnover of purchases would have to be calculated after deducting both the components – Definition of Purchase Price u/s.2(18) is enumerative and exhaustive – The use of the word “means” denote the intention of the legislature to restrict the * Author [2024] 8 S.C.R. 35 The State of Gujarat v. M/s Ambuja Cement Ltd. scope of the “purchase price” to the categories enumerated in the definition itself – Therefore, the purchase price would be the amount of valuable consideration paid or payable for any purchase which would include amount of duties, levied or leviable under the two Acts (Central Excise Tariff Act, 1985 and the Customs Act, 1962) provided for in this Section apart from the other charges as expounded therein – The scope has been limited to the two Acts mentioned in the Section itself – The same could not be expanded – Thus, the intention of the legislature was to exclude Value Added Tax from the ambit of purchase price as the same is not found mentioned in the categories of tax/duties enumerated thereunder – Order passed by the Tribunal and upheld by the High Court not interfered with. [Paras 18, 17, 15, 19] Interpretation of Statutes – Taxation statutes – Strict interpretation – Duty of the Court: Held: The Courts ought to read the statute as it is and if the words therein are clear and unambiguous then only one meaning can be inferred – Courts are bound to give effect to the said meaning irrespective of the consequences so far as the taxation statutes are concerned – Article 265 of the Constitution of India prohibits the State from extracting tax from the citizens without the authority of law – The tax statutes have to be interpreted strictly – Legislature mandates taxing certain persons in certain circumstances which cannot be expanded or interpreted to include those who were not intended or comprehended – The assessee is not to be taxed without clear words and, for that purpose, the same must be according to the natural construction of the words which have been used in that statute – These words have to be read as it is and thus, cannot be added or substituted which may give a meaning other than what is expressed in the provision. [Para 12] Case Law Cited Commissioner of Wealth Tax, Gujarat-III, Ahmedabad v. Ellis Bridge Gymkhana [1997] Supp. 4 SCR 626 : 1998 (1) SCC 384; P. Kasilingam and Others v. P.S.G. College of Technology and Others [1995] 2 SCR 1061 : (1995) Supp 2 SCC 348 – relied on. List of Acts Gujarat Value Added Tax Act, 2003; Central Excise Tariff Act, 1985; Customs Act, 1962; Constitution of India. 36 [2024] 8 S.C.R. Digital Supreme Court Reports List of Keywords Purchase
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