Fuel used in generator sets for manufacturing was covered as goods required for use in production, despite alternative remedies

Availability of an alternative statutory remedy did not bar writ jurisdiction where the dispute raised a pure question of law on the scope of a taxing provision, so the petitions were maintainable. Diesel oil used in generator sets to supply electricity for running plant and machinery in manufacturing was treated as goods required for use in the manufacture of notified goods because fuels were expressly included and the diesel formed an integral, necessary part of the production process. On that basis, deletion of diesel oil from the recognition certificates was unsustainable and the writ petitions were allowed.

---

---

Issues: (i) Whether the writ petitions were barred by the availability of an alternative statutory remedy; (ii) Whether diesel oil used in generator sets for running plant and machinery to manufacture notified goods fell within the expression "for use in the manufacture of notified goods" under Section 4-B(2) of the U.P. Trade Tax Act, 1948.

Issue (i): Whether the writ petitions were barred by the availability of an alternative statutory remedy.

Analysis: The existence of an appellate or revisional remedy does not operate as an absolute bar to writ jurisdiction. Where the dispute turns on a pure question of law, particularly the interpretation of a taxing provision, the High Court may entertain the petition despite the statutory hierarchy of remedies. The petitions involved no factual controversy and raised a legal question on the scope of Section 4-B(2).

Conclusion: The writ petitions were maintainable and were not liable to be dismissed on the ground of alternative remedy.

Issue (ii): Whether diesel oil used in generator sets for running plant and machinery to manufacture notified goods fell within the expression "for use in the manufacture of notified goods" under Section 4-B(2) of the U.P. Trade Tax Act, 1948.

Analysis: The statutory explanation to Section 4-B(2) expressly includes fuels within the expression "goods required for use in the manufacture". The use of diesel in generator sets was essential to generate electricity for operating the plant and machinery, and the manufacturing process depended upon that power supply. Applying the settled principle that goods used in an integrated and essential process of manufacture are covered even if they are not directly incorporated in the final product, diesel oil used for generation of electricity was held to be covered by the provision.

Conclusion: Diesel oil used in generator sets for running the manufacturing plant was covered by Section 4-B(2) and could not be deleted from the recognition certificate.

Final Conclusion: The impugned orders deleting diesel oil from the recognition certificates were unsustainable, and the writ petitions were allowed.

Ratio Decidendi: For the purpose of a tax concession on goods required "for use in the manufacture", a fuel used in generator sets to operate essential plant and machinery is included where it forms an integral and necessary part of the manufacturing process.

---