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2016 (4) TMI 1399 - HC - VAT and Sales TaxLevy of VAT - purchases is required to be excluded for computing “taxable turnover of purchases” - purchases on which value added tax is neither claimed nor granted are required to be excluded for computing “taxable turnover of purchases” - section 11(3)(b) of Gujarat VAT Act - HELD THAT:- Section 11(3)(b) of the GVAT Act provides that notwithstanding anything contained in the section, the amount of tax credit in respect of a dealer shall be reduced by the amount of tax calculated at the rate of four per cent on the taxable turnover of purchases within the State - (i) of taxable goods consigned or dispatched for branch transfer or to his agent outside the State, or (ii) of taxable goods which are used as raw materials in the manufacture, or in the packing of goods which are dispatched outside the State in the course of branch transfer or consignment or to his agent outside the State, (iii) of fuels used for the manufacture of goods. Thus, the amount of tax credit in respect of a dealer is required to be reduced by the amount of tax calculated at the rate of four per cent on taxable turnover of purchases within the State. The controversy involved in the present case is as regards the taxable turnover of the purchases made by the petitioner. It would, therefore, be germane to refer to the definition of “taxable turnover” as defined under section 2(30) of the GVAT Act which provides that “taxable turnover” means the turnover of all sales or purchases of a dealer during the prescribed period in any year after deducting therefrom, the matters enumerated thereunder. Sub-section (32) of section 2 defines “taxable turnover of purchases” to mean the aggregate of the amounts of purchase price paid or payable by a dealer in respect of any purchase of goods made by him during a given period after deducting the amount of purchase price, if any, refunded to the dealer by the seller in respect of any goods purchased from the seller and returned to him within the prescribed period. Thus, turnover of purchases is the aggregate of the amount of purchase price paid or payable by a dealer in respect of purchases made by him. When the word “includes” is used in a definition as in the case of section 2(18) of the GVAT Act, it is clear that the legislature does not intend to restrict the definition; it makes the definition enumerative and not exhaustive, that is to say, the term defined will retain its ordinary meaning but its scope would be extended to bring within the term certain matters which in its ordinary meaning it may or may not comprise. Inclusion of the words “duties levied or leviable under the Central Excise Tariff Act, 1985 or the Customs Act, 1962” is an inherent indicator of the legislative intent to include only those duties/taxes within the purview of the expression “purchase price”. Therefore, the intention of the legislature to exclude value added tax from the ambit of purchase price is clear, as otherwise, the same would also have found place in the categories - the view adopted by the Tribunal is in consonance with the construction of section 2(18). Since the interpretation of “purchase price” as defined under section 2(18) of the Act is the foundation for interpretation of the expressions “turnover of purchases” and “taxable turnover”, once it is held that the purchase price does not include the value added tax component, it follows that calculation of input tax credit under section 11(3)(b) of the GVAT Act is also required to be made by excluding the value added tax component from the total turnover of the dealer. It is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law - Appeal dismissed.
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