- (1.) Heard Sri S.D. Singh, learned Senior Counsel assisted by Sri Piyush Agarwal, learned counsel for the petitioners and Sri C.B. Tripathi, learned Special Counsel for the respondents.
(2.) In this bunch of writ petitions the interpretation of the provision of Section 4-B(2) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') is involved. There is no factual dispute. Under the circumstance, all the writ petitions have been heard together. For the sake of convenience, the facts of the Writ Tax No.255 of 2012 is taken into consideration.
(3.) The petitioners are manufacturers and have applied for a Recognition Certificate under Section 4-B(2) of the Act for concessional rate of tax on purchase of goods for use in the manufacture of their final product which is a notified goods. The Recognition Certificate under Section 4-B(2) of the Act was granted by the Assessing Authority in which the goods 'diesel' was also mentioned under the category 'fuel'.' The petitioners were using diesel in their generator sets, which produced electricity, which was used to run the plant and machinery to manufacture the notified goods. Subsequently, the Commissioner of Trade Tax, U.P., Lucknow, issued a circular dated 20.7.2000 to all the subordinate officers directing that the benefit of form III-B for concessional rate of tax under Section 4-B of the Act shall not be given on purchase of diesel oil for use in generator sets in the factory. Consequently, notices were issued on 29.06.2000 by the Assessing Authority to the petitioners for deleting the goods 'diesel oil' from their Recognition Certificate under Section 4-B(2) of the Act. Aggrieved with this, large number of dealers including the petitioners filed writ petition before this Court. The petitioner filed Writ Petition No.686 of 2000, which was allowed in terms of the judgment dated 25.3.2003, in leading Writ Petition No.628 of 2000, M/s. Vam Organic Chemicals Ltd. Vs. State of U.P. and others, 2003 UPTC 467, and the Circular dated 20.6.2000 and the notice dated 29.6.2000 were quashed. The Court held: "14. In our opinion the stand taken by the respondent, is overtechnical. In our opinion the diesel oil used by the petitioner is used for the manufacture of notified goods as mentioned in Section 4-B(2) of the U.P. Trade Tax Act. It may be noted that Section 4-b(2) does not mention that the goods referred to in sub-section (1) should be used directly for the manufacture of the notified goods. It is a settled principle of interpretation that ordinarily its words should not be added or deleted in a statute and instead the statute should be read as it is. This is the literal or grammatical principle of interpretation, which is applied with greater force in taxing statutes than in other statutes. 31. If the stand of the respondent is accepted then we will be adding the word 'directly' in Section 4-B(20 before the words 'for use in the manufacture'. This would be against the settled principle of interpretation referred to above. In our opinion, diesel oil is certainly fuel which is essential for operating the machinery in a continuous process industry like that of the petitioner. Hence in our opinion, diesel is clearly covered by Clause (a) of the Explanation to Section 4-B(2) of the U.P. Trade Tax Act. In the event of breakdown of power supply to the generating sets of the petitioner the production in the factory will come to a halt as there will be no electricity for use by the factory and there will be damage to the machinery. Hence diesel oil is certainly goods used by the petitioner for the manufacture in his factory. 42 In our opinion, the word 'fuel' will include all kinds of fuel whether in gaseous, liquid or solid form and hence it will include diesel oil fuel, RFO, natural gas, naphtha, etc.";