Direct use in manufacture allows eligibility certificate amendment for goods connected with manufacturing activity and packing needs.

Rule 52 of the West Bengal Sales Tax Rules, 1995 allows deduction for sales to a registered dealer enjoying tax remission only where the goods are specified in the purchaser's registration certificate for direct use in manufacturing goods for sale in West Bengal. Goods such as containers, laboratory equipment, chemicals, stores, spare parts, consumables, plant and machinery accessories were treated as connected with the manufacturing activity, and containers and packing materials were recognised as falling within "used directly" because manufactured goods ordinarily require suitable packing for sale. The refusal to amend the eligibility certificate was therefore legally unsustainable, and inclusion of the items was warranted.

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Issues: Whether the amendment of the eligibility certificate could be refused on the ground that the goods sought to be included were not used directly in the manufacture of the finished products.

Analysis: Rule 52 of the West Bengal Sales Tax Rules, 1995 permits deduction in respect of sales to a registered dealer enjoying tax remission only where the goods are specified in the purchasing dealer's registration certificate as intended for use directly in the manufacture of goods for sale in West Bengal. The goods sought to be included, including containers, laboratory equipment, chemicals, stores, spare parts, consumables, plant and machinery and accessories, were shown to be connected with the petitioner's manufacturing activity. Containers and packing materials were also treated as falling within the expression "used directly" in the context of goods manufactured for sale, since manufactured goods cannot ordinarily be sold without suitable packing. The reasoning adopted in the impugned orders was held to be legally unsustainable.

Conclusion: The refusal to amend the eligibility certificate was unjustified and the petitioner was entitled to inclusion of the sought items in the eligibility certificate.

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