1979 (8) TMI 196 - HC - VAT and Sales Tax

Summary

Issues:
The issue involved in this case is whether condensed milk qualifies for exemption under the relevant sales tax notification.

Summary:
The revision petition was filed under section 38 of the Tamil Nadu General Sales Tax Act, concerning the eligibility of condensed milk for exemption. The assessee argued that condensed milk should be considered as milk and thus exempt from tax. The assessing authority and the Appellate Assistant Commissioner rejected this claim, but the Sales Tax Appellate Tribunal ruled in favor of the assessee based on a decision of the Allahabad High Court. The State challenged this decision in revision before the Madras High Court.

The relevant notification exempts "all sales of paddy, rice, cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, rice products, and milk" from tax. The Allahabad High Court had previously determined that condensed milk is essentially milk in concentrated form, qualifying for exemption under a similar notification. The State argued that the manufacturing process involved in producing condensed milk makes it distinct from milk. However, the Court referenced previous cases where processed milk, even with added ingredients, was still considered milk for exemption purposes.

The Court concluded that the process of dehydrating milk to create condensed milk does not change its fundamental nature as milk. Just as boiled milk remains milk despite alterations, condensed milk retains its essential character. The popular understanding of milk also supports this interpretation, as even commercially bottled milk undergoes processing without losing its identity as milk. Therefore, the revision petition was dismissed, upholding the eligibility of condensed milk for exemption under the sales tax notification.

In conclusion, the Court upheld the decision of the Sales Tax Appellate Tribunal, ruling that condensed milk qualifies for exemption under the relevant notification.