TaxTMI 
TaxTMI 
2001 (3) TMI 1012
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....as also installed six diesel generating sets (having total capacity of 2,830 KVS) through which electricity is generated by using high speed diesel oil. The petitioner's case is that high speed diesel used in the generation of electricity falls in the class of goods used for manufacture of oil and, therefore, in terms of section 15-A of the Act, it is entitled to reduction or refund of tax paid at the time of purchase of high speed diesel, but this item has been arbitrarily excluded from the class of goods included in clause (3) of annexure P. 1 depriving it of the said benefit. 3.. Shri Ashok Aggarwal, Senior Counsel, appearing for the petitioner, argued that the impugned notification should be declared ultra vires to the power of the State Government because section 15-A(1) does not empower it to exclude high speed diesel from the list of goods used for manufacture or processing of edible and non-edible oil by the dealer. Learned counsel submitted that high speed diesel used for generating the electricity should be treated as a raw material used for manufacturing edible and non-edible oil because the electricity is necessary for running the industry. In support of this argum....
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....ormulae for computing the fraction and different conditions and restrictions for being entitled to reduction or refund of tax under this provision may be specified in different circumstances or for different class of dealers or for different goods or class of goods, used in manufacture or produced. If the input tax credit which is the amount of input tax multiplied by the fraction computed by the given formula exceeds the output tax liability for any period, then the excess amount, subject to a ceiling as the State Government may, by notification, in the Official Gazette, impose, can, at his option, be carried forward by the dealer to the next period or may be claimed as refund by him. (2) The Assessing Authority may, before reducing or refunding any amount under this section, call for such evidence in proof of payment of tax as, in his opinion, is necessary. (3) Where the manufactured goods are sent on consignment transfer out of the State for sale or disposed of in any manner other than by way of sale, the value of such goods shall be taken as the price at which such goods are ordinarily sold; and where the manufactured goods are sent on consignment transfer out of the State fo....
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....er section 15-A, the State Government issued notification annexure P1 prescribing the formula for reduction/refund of tax. Clause (3) of the impugned notification lays down that for the purpose of calculating input tax, the goods used in or in the processing of manufacture shall be goods used by a dealer as raw materials, processing materials, tools, stores, spare parts, accessories, lubricants or fuel except high speed diesel used in the manufacture or processing of goods for sale include containers and packing materials used for packing of the goods manufactured or processed. The reason for excluding high speed diesel from the class of goods which constitutes raw material used for manufacture or processing goods appears to be that it is not used in the manufacture or processing, but is used for generating electricity which, in turn, is used for running the industry. The petitioner has not produced any evidence to prove to the contrary. The averments made in paragraph 3 of the writ petition also indicate that high speed diesel is used for generating electricity and not for manufacturing the product of the petitioner, i.e., edible and non-edible oil. Therefore, we are unable to agr....
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....nia which can be regarded as feed stock in contra-distinction to LSHS which is burnt and as a result whereof steam is generated which in turn is used in the process. In the abovementioned second case, LSHS is used in the manufacture of ammonia but not as a feed stock. As such, benefit of notification No. 127 of 1988 would be available to the appellants in respect of LSHS which has been used for generating steam and this will be with effect from 1st March, 1988. In respect of the earlier period, it is only that part of LSHS which will be entitled to 100 per cent exemption from excise duty by virtue of Notification No. 147 of 1974 and Notification No. 75 of 1984 which has been used as feed stock and not for the purpose of generating steam." 7.. We may now refer to the two decisions relied upon by Shri Aggarwal. In Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar [1965] 16 STC 259 (SC); AIR 1965 SC 891, their Lordships of the Supreme Court examined the provisions of section 8(3)(b) of the Central Sales Tax Act, 1956 (for short, "the Central Act") and rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957 in the context of the ....
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....ply a connection between the goods and the manufacturing or processing of goods or the mining operations so as to make them goods intended for use in those operations. ........………… 'Stationery' also is not intended for use in the manufacture or processing of goods for sale or for mining operations. Use of stationery undoubtedly facilitates the carrying on of a business of manufacturing goods or of processing goods or even mining operations; but the expression 'intended to be used' cannot be equated with 'likely to facilitate' the conduct of the business of manufacturing or of processing goods or of mining. Those cane baskets which are intended to be used by the sanitary department for collecting refuse to protect the health and cleanliness of the colony and the workmen employed in the manufacture of goods, cannot, on the test set out earlier, be specified in the certificate of registration. But we are unable to agree with the High Court that the cane baskets which are required for carrying ore and other materials used in mining or in the manufacture of goods are not intended for use in the process of manufacturing or mining op....
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....#39; should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judgment, fall within the expression 'in the manufacture of goods'. ……………… ……….The expression 'in the manufacture' takes in within its compass, all processes which are directly related to the actual production. Goods intended as equipment for use in the manufacture of goods for sale are expressly made admissible for specification. Drawing and photographic materials falling within the description of goods intended for use as 'equipment' in the process of designing which is directly related to the actual production of goods and without which commercial production would be inexpedient must be regarded as goods intended for use 'in the manufacture of goods.' Building materials including lime and cement not required in the manufacture of ....