1964 (9) TMI 48 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term 'curd' in Schedule I of the Madhya Pradesh General Sales Tax Act, 1958.

Analysis:
The case involved a reference under section 44 of the Madhya Pradesh General Sales Tax Act, 1958, regarding the classification of 'khowa' under the term 'curd' in Schedule I of the Act. The assessee contended that 'khowa' should be exempt from tax as per entry No. 21 of Schedule I. The Sales Tax Tribunal accepted this argument, considering 'khowa' to be 'curd'. However, the High Court analyzed the common parlance and popular meaning of the terms 'milk', 'curd', 'condensed and powdered milk', and 'butter-milk' as per Schedule I. The Court emphasized that exemptions must be construed strictly and must clearly fall within the language granting exemption. The Court referred to legal precedents to support the strict interpretation of exemptions under tax statutes.

The Court further analyzed the characteristics of 'khowa' and distinguished it from 'curd', 'condensed and powdered milk', and 'butter-milk'. It explained that 'khowa' is a milk product obtained by boiling milk to a certain consistency, different from the process of obtaining curd. The Court highlighted that 'khowa' does not fall under the exemption for 'milk' as specified in Schedule I. The Court also rejected the argument that the Hindi version of a previous Act could influence the interpretation of 'curd' in the present Act, emphasizing that the assessment was under the Act of 1958.

Based on the analysis, the Court concluded that 'khowa' does not qualify as 'curd' under item No. 21 of Schedule I of the Act and is not exempt from tax under the entry. The parties were left to bear their own costs, and the reference was answered accordingly.