Court allows writ petitions, deems diesel use in generator sets for manufacturing as eligible under U.P. Trade Tax Act

The court allowed all writ petitions, setting aside the impugned orders by the Assessing Authorities. It held that the use of diesel oil in generator sets to run plant and machinery for manufacturing the final product qualifies as "for use in the manufacture of notified goods" under Section 4-B(2) of the U.P. Trade Tax Act, 1948.

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Issues Involved:
1. Whether writ petitions are liable to be dismissed on the ground of alternative remedy.
2. Whether the use of diesel oil in generator sets to run plant and machinery to manufacture the final products as mentioned in the Recognition Certificate would qualify the essential requirement "for use in the manufacture of notified goods" under Section 4-B(2) of the U.P. Trade Tax Act, 1948.

Detailed Analysis:

Issue 1: Alternative Remedy
The court acknowledged the wide discretionary powers conferred by Article 226 of the Constitution of India, emphasizing that the High Court may refuse to exercise discretion if an adequate or suitable remedy exists elsewhere. However, exceptions to this rule include instances where there is a complete lack of jurisdiction, violation of fundamental rights, or when an order is passed in violation of natural justice principles. The court cited several precedents to support this view, including *Himmatlal Harilal Mehta v. State of Madhya Pradesh* and *Union of India v. Tantia Construction (P) Ltd.* Ultimately, the court found that the present writ petitions involved a pure question of law regarding the interpretation of Section 4-B(2) of the Act, making them entertainable despite the availability of an alternative remedy.

Issue 2: Use of Diesel Oil in Manufacture
The court noted that the petitioners were granted Recognition Certificates under Section 4-B(2) of the Act, which included diesel oil under the category of "fuel." The court found that the diesel oil used in generator sets to produce electricity, which in turn was used to run the plant and machinery, was integrally connected with the manufacture of the notified goods. The court emphasized that the entire process of manufacturing the final product required the use of diesel oil in generators, making it essential for the production process.

The court referred to several precedents, including *M/s. J.K. Cotton Spinning and Weaving Mills, Co. Ltd. v. The Sales Tax Officer, Kanpur* and *Indian Farmers Fertilisers Cooperative Ltd. v. Collector of Central Excise, Ahmedabad*, to support the view that the expression "in the manufacture of goods" encompasses the entire process of converting raw materials into finished goods. The court concluded that diesel oil used in generator sets to produce electricity for running plant and machinery falls within the expression "for use in the manufacture of notified goods" under Section 4-B(2) of the Act.

Conclusion:
The court allowed all the writ petitions, setting aside the impugned orders passed by the respective Assessing Authorities. The court held that the use of diesel oil in generator sets to run plant and machinery for manufacturing the final product qualifies as "for use in the manufacture of notified goods" under Section 4-B(2) of the U.P. Trade Tax Act, 1948.

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