Fuel used for captive power generation in manufacturing falls within concessional goods under the trade tax provision.

Section 4-B(2) of the U.P. Trade Tax Act was interpreted to include diesel oil used in captive generating sets where the electricity supplied was integral to a continuous manufacturing process. The provision expressly covers fuel among goods required for use in manufacture, and the court declined to read in a requirement that such goods be used directly in the notified product. On that construction, diesel oil used for captive power generation remained eligible for concessional treatment, and its deletion from the recognition or registration certificates, along with the consequential circular and notices, was unsustainable.

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Issues: Whether diesel oil used in diesel generating sets of a continuous process industry is covered by the expression goods required for use in the manufacture under section 4-B(2) of the U.P. Trade Tax Act, 1948, and whether the authorities could delete diesel oil from the recognition and registration certificates and refuse concessional forms.

Analysis: Section 4-B(2) and its explanation expressly include fuels among goods required for use in manufacture. The provision does not say that such goods must be used directly in the manufacture of notified goods, and no word can be added into a taxing provision to narrow its scope. Diesel oil was used to run the generating sets that supplied electricity to the factory, and in a continuous process industry the generating sets formed an integral part of the manufacturing machinery. Applying the literal rule and strict construction of taxing statutes, the expression fuel was held wide enough to include diesel oil used for captive generation of electricity essential for production.

Conclusion: Diesel oil used in the petitioner's generating sets was covered by section 4-B(2) and could not be deleted from the recognition or registration certificates; the impugned circular and consequential notices were unsustainable.

Final Conclusion: The writ petition succeeded and the petitioner obtained the relief of continued concessional treatment for diesel oil used in its captive power generation for manufacturing purposes.

Ratio Decidendi: Where a taxing provision expressly includes fuel among goods required for use in manufacture, the Court cannot read in a requirement of direct use, and fuel used for captive power generation essential to manufacturing falls within the provision.

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