STATE OF U.P. vs M/S. VAM ORGANIC CHEMICALS LTD.

The Supreme Court ruled that the purchase of high speed diesel oil (HSD) by M/s. Vam Organic Chemicals Limited, under concessional rates as per Section 4-B of the Uttar Pradesh Trade Tax Act, 1948 and Section 7 of the Central Sales Tax Act, 1956, is valid as it is essential for operating Diesel Generating Sets used in the manufacturing process. The Court held that the denial of concessional rates based on the argument that HSD is not directly used in manufacturing is incorrect, as it is integral to the production process. The Court quashed the show-cause notice issued for the deletion of HSD from the Recognition Certificate, thereby upholding the Company's entitlement to purchase HSD at concessional rates.