Diesel oil as manufacturing fuel protected under recognition certificate rules despite circular-based exclusion.

Diesel oil used in generator sets to power a factory was treated as goods required for use in manufacture where the statutory explanation to section 4-B(2) expressly included fuels. The court applied the plain meaning of the provision and rejected any administrative attempt to narrow it by inserting the word "directly" before "for use in the manufacture". It also held that circulars deleting diesel oil from the recognition certificate could not override the statute. Accordingly, diesel oil used in the manufacturing process remained eligible for purchase against the recognition certificate, and the authorities were required to continue issuing the relevant form.

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Issues: Whether diesel oil used in diesel generator sets for running the factory is covered as goods required for use in manufacture under section 4-B(2) of the U.P. Trade Tax Act, 1948, and whether the circulars deleting diesel oil from the recognition certificate could stand.

Analysis: The recognition certificate under section 4-B(2) extended to goods required for use in manufacture, and the explanation specifically included fuels. The Court followed the earlier Division Bench view that diesel oil used for generating electricity in a continuous process industry is part of the manufacturing apparatus for the purposes of the provision. It held that the statutory language could not be curtailed by inserting the word "directly" before "for use in the manufacture," because words cannot be added to a taxing statute. On a plain reading, fuel includes diesel oil and other fuels used for operating the manufacturing process.

Conclusion: Diesel oil used in the petitioner's generators was held to be goods required for use in manufacture under section 4-B(2) of the U.P. Trade Tax Act, 1948, and the circulars deleting it from the recognition certificate were invalid.

Final Conclusion: The petitioner's entitlement to purchase diesel oil against the recognition certificate was upheld, and the authorities were directed to continue issuing the relevant form for such purchases.

Ratio Decidendi: Where the statutory explanation to a fiscal provision includes fuels as goods required for use in manufacture, diesel oil used for generating power in the manufacturing process cannot be excluded by administrative circular or by reading limiting words into the statute.

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