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2023 (1) TMI 586 - HC - VAT and Sales TaxRejection of claim of set off in respect of raw material used in the manufacturing of M.S. Ingot for the relevant assessment year - year 2005-06 - whether the benefit of set off as envisaged under Section 4-BB of UP Trade Tax Act, 1948 could be passed upon the assessee/dealer or not? - HELD THAT:- Though the raw material has not been defined under the Act but the Section provides for giving the benefit of set off to a manufacturer using raw material and packaging material. The controversy relating to set off has been engaging the attention of this Court as well as Apex Court in various judgments. The Apex Court has considered on number of occasions the matter relating to the grant of set off for various states and in one of the matter M/s. Vam Organic Chemicals Ltd. Vs. State of U.P. & others [2003 (3) TMI 672 - ALLAHABAD HIGH COURT] where it was held that for use in manufacture of notified goods which finds place in Section 4-B (2) of the Act of 1948 it would take within its compass 'diesel oil' used by the manufacturer in generators installed in factory premises to produce electricity. The Division Bench had held the 'diesel oil' used in the generator to be one of the raw material and had extended the benefit to the assessee. The explanation to Sub-section 2-A of Section 4-B defines the goods required for use in manufacture as well as the notified goods in Sub-clause (a) and (b) of the explanation to the aforesaid provision. From the reading of Section 4-B and Section 4-BB, it is clear that the intention of Legislature was clear to the extent of giving certain relief to the manufacturer while they were using raw material and packaging material in the manufacture of goods. Section 4-BB, in particular, provides for set off taxes paid on the raw material and packaging material - In the present case, the natural gas purchased by a dealer from GAIL whether comes under the purview of word 'raw material' or not. In Shree Bhawani Paper Mills Ltd. [2015 (11) TMI 48 - ALLAHABAD HIGH COURT] the Division Bench had held the diesel oil to be raw material used for running the generator for production of electricity - In Rajasthan Taxchem Ltd. [2007 (1) TMI 187 - SUPREME COURT] the Apex Court while considering whether the diesel used in running of the generator was also a raw material or not, held that the assessee was entitled to the relief as provided under Rajasthan Sales Tax Act for concessional rate of taxes. Iron steel has been notified by the State Government by notification dated 22.05.1998 to be notified goods under Section 4-BB of the Act of 1948. In the process of manufacture of M.S. Ingot the fuel which is used by the manufacturer is the natural gas which is a raw material. The fire which is ignited for making the M.S. Ingot is by the use of natural gas. Thus, the process of manufacture of M.S. Ingot requires certain raw materials and natural gas fits into the definition of raw material, as provided under Section 4-BB of the Act of 1948. This Court finds that the gas used by the assessee in the manufacture of M.S. Ingot is one of the raw material, as mentioned in Section 4-BB of the Act - Revision allowed.
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