COMMERCIAL TAXATION OFFICER, UDAIPUR vs M/S. RAJASTHAN TAXCHEM LTD.

The Supreme Court addressed the interpretation of 'raw material' under Section 10(1) of the Rajasthan Sales Tax Act, 1994, specifically whether diesel can be classified as such in the manufacture of polyester yarn. The Court held that diesel, used to generate electricity for the manufacturing process, qualifies as a raw material under the definition provided in Section 2(34) of the Act, which includes goods used as ingredients in manufacturing. Consequently, the Court ruled in favor of the respondent, allowing the concessional tax rate of 3% on diesel purchases.