Purchase tax and manufacturing fuel: pre-1997 section 7A did not cover kerosene used only for manufacture.

Before the 1997 amendment to section 7A of the Tamil Nadu General Sales Tax Act, purchase tax applied only to goods consumed or used in the manufacture of other goods, not to goods merely used for the manufacture as fuel. On the facts discussed, kerosene was used as fuel in producing cycle parts and was not an input consumed in the manufacturing process. The later amendment introducing the words "in or for the manufacture" operated only from 6 November 1997 and did not apply to the 1993-94 assessment year. The kerosene was therefore not taxable under section 7A for that year.

---

---

Issues: Whether kerosene used as fuel in the manufacture of cycle parts was liable to purchase tax under section 7A of the Tamil Nadu General Sales Tax Act, 1959, as it stood prior to 6 November 1997.

Analysis: For the assessment year 1993-94, section 7A(a), before its amendment by Act 60 of 1997, covered only goods consumed or used "in the manufacture" of other goods. The statutory language did not then include goods used merely "for the manufacture". On the facts found, the kerosene was used as fuel for manufacture and not as an input consumed in the manufacture of the end-products. The amended wording, which introduced "in or for the manufacture", applied only from 6 November 1997 and therefore did not govern the assessment year in question.

Conclusion: The kerosene was not taxable under section 7A for the relevant assessment year, and the assessee succeeded.

Ratio Decidendi: Before the 1997 amendment, purchase tax under section 7A could be levied only where the goods were consumed or used in the manufacture of other goods, and not where they were merely used for the manufacture as fuel.

---