1978 (8) TMI 207 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether kulfi is considered cooked food?
2. Whether kulfi is classified as a milk product and exempt from tax under specific notifications?
3. Whether kulfi is taxable under a particular notification?

Detailed Analysis:
Issue 1: The judgment addresses whether kulfi can be categorized as cooked food. The court examined the manufacturing process of kulfi, which involves heating milk until it thickens, adding sugar, dry fruits, and essence, filling the mixture into containers, freezing it, and then selling it. The court compared this process with the definition of cooked food, emphasizing that cooking typically involves the application of heat for consumption during meals. Referring to a precedent regarding biscuits, the court concluded that kulfi does not meet the criteria of being considered cooked food, as it is not consumed during traditional meals.

Issue 2: The judgment delves into whether kulfi qualifies as a milk product exempt from tax under specific notifications. The court analyzed the relevant notifications, particularly focusing on the definition of milk product. The original notification of March 31, 1956, listed milk and various milk products, excluding certain items like products sold in sealed containers and sweetmeats. An amendment in 1965 clarified the list, but the core definition of milk product remained unchanged. The court emphasized that a milk product must be derived from milk, either naturally or through processing. In the case of kulfi, although sugar, dry fruits, and essence are added for flavor, the primary component remains milk. Consequently, the court determined that kulfi qualifies as a milk product and is therefore exempt from tax under the specified notifications.

Issue 3: The judgment also addresses whether kulfi is subject to taxation under a specific notification from February 16, 1965. By analyzing the amendments made in the notification and the definition of milk product, the court concluded that kulfi falls under the category of milk product and is exempt from taxation. Therefore, the court ruled that kulfi is not taxable under the notification dated February 16, 1965. As a result, the court decided in favor of the assessee, awarding costs amounting to Rs. 200 and providing a comprehensive resolution to all three questions raised in the reference.