Binding precedent on input tax credit for capital goods materials leads to dismissal of the tax appeal.

Input tax credit under Section 11(3)(a)(vii) of the Gujarat Value Added Tax Act, 2003 was claimed on purchases of cement, sand, steel, grit, concrete and similar materials used to manufacture capital goods. The Gujarat HC held that the issue was already covered by an earlier Division Bench decision affirmed by the Supreme Court, so no contrary view could be taken. The court therefore followed the binding precedent, answered the issue against the Revenue and in favour of the assessee, dismissed the tax appeal, and held that the connected civil application did not survive.

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Issues: Whether input tax credit under Section 11(3)(a)(vii) of the Gujarat Value Added Tax Act, 2003 was available on purchases of cement, sand, steel, grit, concrete and similar materials used for manufacture of capital goods.

Analysis: The issue was stated to be squarely covered by an earlier Division Bench decision which had been affirmed by the Supreme Court. In view of that binding conclusion, no contrary view could be taken in the present appeal.

Conclusion: The issue was answered against the Revenue and in favour of the assessee.

Final Conclusion: The tax appeal was dismissed, and the connected civil application did not survive.

Ratio Decidendi: Where the question raised is already concluded by binding precedent affirmed by the Supreme Court, the appellate court will follow that precedent and refuse to grant relief contrary to it.

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