2007 (4) TMI 659 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of Central Sales Tax Act and Central Sales Tax (Registration and Turnover) Rules regarding inclusion of high-speed diesel in Central Registration Certificate for concessional tax rate.

The judgment involves a revision filed by the Revenue against the Trade Tax Tribunal's order directing the addition of high-speed diesel in the Central Registration Certificate for a business dealing in manufacturing and sale of brass artwares. The assessing authority and first appellate authority had initially declined the request of the assessee. The key question revolved around whether the use of fuel in running a generator would fall under rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957, and section 8(3)(b) of the Central Sales Tax Act, 1956. Section 8(3)(b) of the Act specifies that goods intended for use in the manufacture of goods for sale or in the generation of power are covered. Rule 13 lists various items including fuel and lubricants for use in manufacturing or power generation as eligible for tax benefits.

The judgment referenced the case of Vam Organic Chemicals Limited v. State of Uttar Pradesh, where it was held that diesel oil and other fuels used for running generator sets are considered part of the manufacturing process. Another decision dated March 30, 2007, in Trade Tax Revision No. 753 of 2001 further supported this interpretation under the Central Sales Tax Act. The High Court, in line with these precedents, concluded that the Tribunal's decision did not warrant interference, leading to the dismissal of the revision. The judgment reaffirmed that fuel or lubricants used in manufacturing or power generation processes are entitled to tax benefits under the relevant provisions, settling the issue in favor of the assessee.