State Of U.P. & Ors vs M/S. Vam Organic Chemicals Ltd

The Supreme Court ruled that under Section 7 of the Central Sales Tax Act, 1956, and Section 4-B of the Uttar Pradesh Trade Tax Act, 1948, M/s. Vam Organic Chemicals Limited is entitled to purchase high speed diesel oil (HSD) at concessional rates, as it is essential for operating Diesel Generating Sets used in the manufacturing process of chemicals. The Court held that the use of HSD for generating electricity is directly linked to the production of notified goods, thus invalidating the circular issued by the Additional Commissioner that sought to deny this benefit. The judgment emphasizes the necessity of HSD in the continuous process of chemical manufacturing, affirming the company's entitlement to the concessional rate.