2003 (3) TMI 672 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the circular dated June 20, 2000, regarding the deletion of diesel oil from the recognition and registration certificates.
2. Entitlement of the petitioner to purchase diesel oil at a concessional rate for use in diesel generating sets.
3. Interpretation of Section 4-B(2) of the U.P. Trade Tax Act concerning the use of diesel oil in manufacturing.

Summary:

1. Validity of the Circular:
The petitioner challenged the circular dated June 20, 2000, which led to the deletion of diesel oil from their recognition and registration certificates. The court found that the circular was issued based on a decision that diesel oil used in generating sets was not directly used in the manufacture of notified goods. The court quashed the circular, stating it was contrary to the statutory provisions of Section 4-B(2) of the U.P. Trade Tax Act.

2. Entitlement to Concessional Rate:
The petitioner, a public limited company, argued that diesel oil is essential for operating their continuous process chemical industry. The court agreed, stating that diesel oil is a fuel necessary for the manufacture of notified goods, and thus, the petitioner is entitled to purchase diesel oil at a concessional rate using forms III-B and C.

3. Interpretation of Section 4-B(2):
The court emphasized the literal interpretation of statutes, particularly taxing statutes. It held that Section 4-B(2) does not require goods to be used directly in the manufacture of notified goods. The court cited several precedents to support the principle that words should not be added or omitted in statutory interpretation. It concluded that diesel oil used in generating sets is covered under the term "fuel" in the explanation to Section 4-B(2).

Conclusion:
The court allowed the writ petition, quashing the impugned circular and notices. It directed the respondents to treat diesel oil used in the petitioner's generators as goods required for manufacturing notified goods and to issue forms III-B and C regularly for purchasing diesel oil. The petition was allowed with no order as to costs.