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2016 (8) TMI 1075 - BOMBAY HIGH COURT

2016 (8) TMI 1075 - BOMBAY HIGH COURT - TMI - Purchase 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 .....

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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 .....

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ty 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 .....

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avour of the Respondent. - SALES TAX REFERENCE NO. 2 OF 2009 IN REFERENCE APPLICATION NO. 96 OF 2006 - Dated:- 23-8-2016 - S.C. DHARMADHIKARI AND B.P. COLABAWALLA JJ. Mrs Uma Palsuledesai, Assistant Government Pleader for Applicant. Mr P.C. Joshi for Respondent. Judgment (Per B.P. Colabawalla J.) :- 1. By this Reference, the First Bench of the Maharashtra Sales Tax Tribunal at Mumbai (for short, the MSTT ) has referred the following questions of law fo .....

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le 41D will not include the amount of Customs Duty paid or payable under the Customs Act, 1962 by the Respondent? (II) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of Explanation-I to section 2(22) added with effect from 1/9/1990 when the sub-clause 2 of sub-rule 3 of Rule 41D specifically provides reduction of 3 % of the purchase price of goods covered under section 75, the Tribunal was justified in law in holding that the term &# .....

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t. 3. The brief facts giving rise to the present controversy are that the Respondent herein (M/s Bajaj Tempo Ltd.) is a manufacturer of motor vehicles, especially three-wheelers and parts thereof. It is duly registered under the provisions of the BST Act as also the Central Sales Tax Act, 1956 (for short, the CST Act ). The Respondent has its factory in Maharashtra and branches in other States. The vehicles manufactured by the Respondent are sold in and from Maharashtra as also trans .....

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filed an Appeal against the same before the Appellate Deputy Commissioner of Sales Tax (Appeals) 2, Pune Division, Pune. After hearing the parties, the Appellate Deputy Commissioner of Sales Tax passed his order dated 23rd July 2003 thereby partly allowing the Appeal filed by the Respondent herein. 6. Still not satisfied with the partial relief granted in the First Appeal, the Respondent herein filed a Second Appeal No.2203 of 2003 before the MSTT. In the Second Appeal filed before t .....

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reduction in the set off under rule 41D of the Bombay Sales Tax Rules, 1959 ('Bombay Rules') with reference of such purchase price of the imports. 7. After hearing both sides on this particular issue, the MSTT in paragraphs 10 and 11 of its judgment dated 10th February, 2006 inter alia held that the situs of the purchase and import was not within the State and therefore such purchases are not a purchase as defined in BST Act. According to the MSTT, it thus clearly followed t .....

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udgment dated 11th August, 2006 was pleased to refer the questions of law set out in paragraph 1 above, for determination of this Court. It is in these circumstances that the present matter has come up before us. 9. In this factual backdrop, Ms Uma Palsuledesai, learned Assistant Government Pleader, appearing on behalf of the Applicant, contended that purchase price has been defined in section 2(22) of the BST Act. It means the amount of valuable consideration paid or payable by a per .....

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a true and correct interpretation of the definition of purchase price read with Explanation I thereto, the same would clearly include the amount of customs duty paid or payable under the Customs Act, 1962. This being the case, Ms Palsuledesai contended that the submission made on behalf of the Respondent that only the cost of material purchased from outside the country should be considered while reducing set off under Rule 41D, is without any substance. According to her, while effecting the purc .....

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Applicant. 10. Before we deal with the present controversy, it would be necessary to set out a few provisions of the BST Act. Firstly, section 2(22) of the BST Act defines purchase price which reads thus:- 2. Definitions - In this Act, unless the context otherwise requires, - (22) purchase price means the amount of valuable consideration paid or payable by a person for any purchase made include any sum charged for anything done by the seller in respect of the go .....

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r the purchaser or any other person; Explanation II - Purchase price shall not include sales tax, (turnover tax, surcharge and resale tax) paid or payable by a person in respect of any such purchase; 11. As can be seen from the definition, purchase price means the amount of valuable consideration paid or payable by a person for any purchase made, including any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, oth .....

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her person. Explanation II stipulates that the purchase price shall not include sales tax, turnover tax, surcharge and resale tax paid or payable by a person in respect of any such purchase. 12. Thereafter, the word sale has also been defined in section 2(28) which reads as under :- 2. Definitions - In this Act, unless the context otherwise requires, - (28) 'sale' means a sale of goods made within the State for cash or deferred payment or other valuable c .....

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in accordance with the principles formulated in sub-section (2) of section 4 of the Central Sales Tax Act, 1956 (LXXIV of 1956); (b)(i) every disposal of goods referred to in the Explanation to clause (11); (ii) a delivery of goods on hire-purchase or any system of payment by installments; (iii) the supply, by way of or as part of any serviced or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drinks (whethe .....

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shall be deemed to be a sale (emphasis supplied) 13. As can be seen from the said definition, 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 registratio .....

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er shall be deemed to impose or authorise the imposition of a tax on any sale or purchase of any goods, where such sale or purchase takes place - (a) (i) outside the State; or (ii) in the course of the import of the goods into the territory of India; or the export of the goods out of such territory; or (b) in the course of inter-State trade or commerce, and the provisions of this Act and the said rules shall be read and construed accordingly; Explanati .....

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s 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. Section 75 further provides that the provisions of the BST Act and the Rules framed thereunder shall be read and construed accordingly. 15. On a conjoint reading of th .....

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