Concessional sales tax on goods used in manufacture extends beyond raw materials to essential functional use in industry.

Goods sold to an industrial unit qualified for concessional sales tax where they were used in manufacture or processing within the State. The expression "use in manufacture" was held not to be confined to consumption as industrial raw material alone; a restrictive reading would render the notification redundant alongside the concession already available under the Act. Rubber gloves used by workers in a refinery were treated as essential to the manufacturing activity, and the purchaser's declaration supported the concession, subject to action against the purchaser for non-use or misdeclaration. The assessee was entitled to the concessional rate on the declared turnover.

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Issues: Whether rubber gloves sold to an industrial unit were eligible for concessional sales tax under the notification on the ground that the goods were used in manufacture, and whether the expression "use in manufacture" could be confined only to consumption in manufacture.

Analysis: The notification granted concessional rate for goods sold to industrial units for use in manufacture or processing of goods within the State. The qualifying condition was the use of the goods in manufacture, not their consumption as industrial raw material alone. A restrictive interpretation would make the notification redundant in the light of the concession otherwise available under section 5(3) of the Kerala General Sales Tax Act, 1963. The nature of the goods and their functional use in the manufacturing process depended on the industry, and rubber gloves used by workers in a refinery were essential for the manufacturing activity. The declaration furnished by the purchaser also provided a basis for action against the purchaser if the goods were not used for the declared purpose or if there was misdeclaration.

Conclusion: The assessee was entitled to concessional rate of tax on the turnover covered by the purchaser's declaration, and the Tribunal's contrary view was unsustainable.

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