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2016 (8) TMI 1075 - HC - VAT and Sales TaxPurchase Price computation - whether the customs duty paid by the Respondent herein (M/s Bajaj Tempo Ltd.) on goods imported by it from out of the country, and which are used in the manufacture of their vehicles, should be included in the definition of the words “purchase price” as set out in section 2(22) of the BST Act? - Held that:- The term “purchase” has been defined in section 2(28) with reference to the definition of the term “sale”. From the aforesaid definition, it would thus be clear that the term “purchase” for the purposes of the BST Act is a purchase made within the State. This is made further clear by the fact that whilst computing the turnover of purchase for ascertaining the liability for registration under section 3, or for ascertaining the leviability of additional tax under section 15AI, or the turnover tax under section 9, only the purchases which are effected within the State have to be taken into consideration.Section 75 clearly stipulates that nothing in the BST Act or the Rules made thereunder shall be deemed to impose or authorise the imposition of tax on any sale or purchase of any goods of which sale or purchase takes place inter alia in the course of import of the goods into the territory of India or the export of the goods outside such territory If the situs of the inter-State purchases and imports is not within the State then such purchases are not a “purchase” as defined under section 2(28) of the BST Act. This being a case, it would therefore logically follow that the term “purchase price” as defined in section 2(22) is applicable only to purchases made within the State and would not be applicable to purchases which take place in the course of import of the goods into the territory of India or export of the goods out of such territory (section 75 of the BST Act). This being the clear position, as can be discerned from the statutory provisions as set out in the BST Act, the customs duty paid on the goods imported into the territory of India by the Respondent herein, cannot be held to be a part of the import purchase price for the purposes of deduction or set off under Rule 41D. BST Act is a State Legislation and does not have extra-territorial jurisdiction. This is clear from the preamble of the Act which clearly states that this is a law (BST Act) relating to the levy of tax on the sale or purchase of certain goods in the State of Bombay. Section 1(2) of the BST Act clearly stipulates that it extends to the whole of the State of Maharashtra. This is yet another factor which would persuade us to hold that the customs duty paid on purchases which take place in the course of import of goods into the territory of India can never be included in the definition of “purchase price” of the said goods. Accordingly questions of law referred to this Court by the MSTT and more particularly set out in paragraph 1 above, are answered in the affirmative and in favour of the Respondent.
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