JUDGMENT

B. N. MAHAPATRA J. - The petitioner, in this writ petition calls in question, the legality of the order dated June 28, 2006 passed by the Assistant Commissioner, Sales Tax, (LTU) Cuttack - II Range, Cuttack (hereinafter called the "the ACST") under section 30 of the Orissa Value Added Tax Act, 2004 (hereinafter called "the OVAT Act") whereby claim of the petitioner that furnace oil qualifies to be an "input" for the purpose of availing input tax credit was rejected. Consequently, a tax demand to the tune of Rs. 32,26,909 was raised by that order.

The facts which give rise to the present writ petition are set out below.

The petitioner in the present case is a company incorporated under the Companies Act, 1956 having its registered office at 3rd Floor, Maker Chambers - IV, 222, Nariman point, Mumbai - 400 021 and factory at Laxminagar, Baulpur, Dhenkanal. It is a dealer registered under the OVAT Act. It manufactures polyester staple fibres (hereinafter referred to as, "the PSF") through Orissa Poly-fibres Limited on job-work basis, out of mono ethylene glycol (hereinafter referred to as "the MEG") and pure teraphthallic acid (hereinafter referred to as "the PTA") and polymer