Integral manufacturing equipment qualifies for sales tax deduction where it is essential to the production process.

Weighing and testing machines used at different stages of the production line were treated as goods used directly in the manufacture of goods for sale because they were integrally connected with the manufacturing process and commercially necessary for production. Physical consumption in the finished product was not required where the equipment formed an essential part of manufacture. On that basis, the deduction under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 was held admissible, and the assessment disallowance was unsustainable.

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Issues: Whether weighing and testing machines sold to registered dealers were goods used directly in the manufacture of goods for sale within section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, so as to entitle the selling dealer to deduction.

Analysis: The deduction turned on the nature and functional use of the goods in the manufacturing process. Goods need not be physically consumed in the finished product if they are used in a process so closely and integrally connected with manufacture that, without them, the manufacture would be commercially inexpedient. On the facts accepted by the Court, the weighing and testing machines were attached to the manufacturing plant at various stages and served an essential role in the process of production. The Court also rejected the contention that the petitioner was disentitled on the broader jurisdictional and alternative-remedy objections raised against the assessment order.

Conclusion: The weighing and testing machines fell within the expression goods used in the manufacture of goods for sale, and the deduction under section 5(2)(a)(ii) was admissible in favour of the assessee.

Final Conclusion: The assessment disallowances were unsustainable and the writ petitions succeeded, leaving the impugned assessment liable to be set aside to the extent challenged.

Ratio Decidendi: Goods used in a process that is integrally connected with production and commercially necessary for manufacture are treated as goods used in the manufacture of goods for sale for the purpose of sales tax deduction.

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