Rohit Ranjan Agarwal, J.

1. Heard Sri Vishwjit, learned counsel for the revisionist and Sri Rishi Kumar, learned Standing Counsel, for the State.

2. This revision arises out of the order of Commercial Tax Tribunal, Bench-I, Agra dated 11.05.2010 whereby the Second Appeal No. 109 of 2009 preferred by the assessee was dismissed.

3. The assessee before this Court is a registered dealer under the U.P. Value Added Tax Act, 2008 (hereinafter referred as the 'Act of 2008'). He is engaged in the business of manufacture of M.S. Ingot, C.I. Castings etc. The dispute is of the year 2005-06. The assessee had claimed set off in respect of raw material used in the manufacturing of M.S. Ingot for the relevant assessment year, which was rejected by the Assessing Authority vide order dated 29.08.2008. Against the said order, a first appeal was preferred before the Joint Commissioner (Appeals), which was also rejected vide order dated 17.01.2009 and the said order was confirmed by the Tribunal by the order impugned herein. Hence, present revision.

4. Present revision was admitted by this Court on 12.11.2021 on the following questions of law;

"(1) Whether in view of the judgment of Hon'ble Apex Court in the case of Commercial Taxation Officer Vs. Rajasthan Taxchem Limited (supra) the authorities were justified in rejecting the claim of the applicant

(2)Whether in view of the judgment of this Hon'ble Court in the case of Rathi Industries Vs. Commissioner Trade Tax (supra) the Tribunal as well as lower authorities was justified in not allowing the claim under Section 4-BB to the applicant

(3)Whether on the facts and circumstances of the case the applicant has purchased natural gas after due payment of tax and the same were used in the furnace for the purposes of blowing and melting the iron steel for the manufacture of ultimate product, namely M.S. Ingot, C.I. Castings etc."

5. Learned counsel appearing for the assessee has submitted that the natural gas purchased by the assessee from Gas Authority of India Limited (GAIL) is a raw material used in manufacture of M.S. Ingot and, thus, in view of Section 4-BB of U.P. Trade Tax Act, 1948 (hereinafter referred as the 'Act of 1948') was entitled to set off. He further submitted that the Tribunal was not justified in refusing the claim of the assessee and upholding the assessment order without recording any finding.

6. Reliance has been placed upon the decision of Apex Court in case of Commercial Taxation Officer, Udaipur Vs. Rajasthan Taxchem Ltd. 2007 UPTC 453, Division Bench of this Court in case of Shree Bhawani Paper Mills Ltd. Vs. State of U.P. & another, (2015) 29 VLJ 119 and a judgment of coordinate Bench of this Court in case of M/s. Rathi Industries Ltd. Gautam Budh Nagar Vs. Commissioner of Trade Tax, 2007 UPTC 296.

7. Per contra, Sri Rishi Kumar, learned Standing Counsel, has submitted that the Assessing Authority had rightly rejected the claim for set off for the use of natural gas as it is not a raw material in manufacture of M.S. Ingot. According to him, Section 4-BB is clear to the extent that a set off can only be granted only on the raw material or packaging material used by a dealer in manufacture and natural gas is not used as a material for manufacture. He further submitted that the judgment rendered in M/s. Rathi Industries Ltd. (Supra) is not applicable in the present case. He further contended that the judgment of the Apex Court in case of Rajasthan Taxchem Ltd. (Supra) is also not applicable as under Rajasthan Sales Tax Act 1994 the word 'raw material' has been defined under Section 2 (34) of the Act of 1994 and the Apex Court had therein considering the said provisions had passed on the benefit to the dealer while there is no such provision under the Act of 1948.

8. I have heard the respective counsel and perused the material on record.

9. The sole dispute in the present revision is whether the benefit of set off as envisaged under Section 4-BB of the Act of 1948 could be passed upon the assessee/dealer or not, 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 UPTC 467, while relying upon the circular dated 20.06.2000, held as under;

"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."

10. Relying upon the judgment of Apex Court the Division Bench of this Court while it was considering the provisions of Section 4-B(2) of the Act of 1948 wherein it was provided for granting specific relief to certain manufacturers, arrived at a conclusion 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.

11. The question which arises for consideration is whether the benefit, which has been passed on by the Division Bench under Section 4-B (2) can be applied in granting the set off under Section 4-BB of the Act of 1948. This Court finds that the consideration before the Division Bench was of the raw material which has been used in the manufacture of goods by a dealer and the benefit as provided under Section 4-B (2) was given to the dealer therein.

12. 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.

13. 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. (Supra) the Division Bench had held the diesel oil to be raw material used for running the generator for production of electricity.

14. In Rajasthan Taxchem Ltd. (Supra) 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.

15. 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.

16. Considering from this angle that the gas is one of the raw material which has been used by the assessee for manufacture of M.S. Ingot, the Assessing Authority as well as the Tribunal was not justified to refuse the claim of the assessee in giving the benefit of set off. Moreover, the Tribunal has not recorded any finding while discarding the claim of the assessee.

17. In view of the said fact, 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-BBof the Act and is covered by the judgment of Division Bench of this Court in case of Shree Bhawani Paper Mills Ltd. (Supra).

18. On due consideration of the aforesaid, the order dated 11.05.2010 passed by the Commercial Tax Tribunal, Bench-I, Agra in Second Appeal No. 109 of 2009, is hereby quashed and set-aside.

19. Revision stands allowed.

20. The questions of law, framed above, stand answered in favour of the assessee and against the revenue.