Exemption for in-house diesel use supports refund of recovered tax where the purchase falls within the eligibility certificate.

Where an eligibility certificate granted exemption from commercial tax and central sales tax for the relevant period, tax recovered on purchase of high speed diesel used for in-house consumption could not be retained by the State once the purchase fell within the exempted use. The Court relied on an earlier ruling recognizing that such fuel purchases are covered by the exemption when used for in-house consumption. As the selling dealers had remitted the tax pursuant to departmental instructions, the petitioner remained entitled to refund from the State. The writ petition succeeded and the authorities were directed to refund the recovered tax within the time fixed by the Court.

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Issues: Whether the petitioner was entitled to refund of commercial tax recovered on purchase of high speed diesel for in-house consumption under the exemption granted to it.

Analysis: The petitioner held an eligibility certificate granting exemption from commercial tax and central sales tax for the relevant period. The amount was recovered from the petitioner on purchase of high speed diesel used for in-house consumption, and the selling dealers remitted the tax to the State pursuant to departmental instructions. A prior decision had already recognized that, where the eligibility certificate covers fuel used for in-house consumption, exemption is available. On the same footing, the tax collected from the petitioner could not be retained by the State once the purchase fell within the exempted use.

Conclusion: The petitioner was entitled to refund of the tax amount from the State.

Final Conclusion: The writ petition succeeded and the authorities were directed to refund the recovered tax to the petitioner within the time fixed by the Court.

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