2012 (4) TMI 544 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of tax exemption notification for flavoured milk sold as a beverage.

Summary:
The High Court of Madras considered the revision filed by the assessee against the orders of the Tamil Nadu Sales Tax Appellate Tribunal regarding tax exemption for flavoured milk sold as a beverage. The key question was whether the assessee is entitled to benefit from the tax exemption under Notification No.II (1)/ CTRE/69/81 dated January 3, 1981. The notification exempted "fresh milk, recombined milk and milk drink with or without any addition thereto for being sold as a beverage."

The petitioner, dealing in flavoured milk, claimed the tax exemption based on the unqualified terms of the notification. However, the assessment under section 16(1) of the Act initially rejected the claim. The Appellate Assistant Commissioner upheld the tax levy but deleted the penalty under section 16(2). Subsequently, the Tribunal, citing a previous court decision, allowed the appeal stating that flavoured milk sold as a beverage is entitled to tax exemption. The Revenue appealed this decision before the High Court.

The appellant argued that the flavoured milk sold by the assessee contains additions, which might disqualify it from the exemption. However, the court noted that the exemption notification does not specify any restrictions on additions to the milk sold as a beverage. Referring to dictionary definitions of "beverage," the court concluded that the flavoured milk falls within the purview of the exemption. Relying on the precedent set by the Deputy Commissioner of Sales Tax v. Pio Food Packers case, the court dismissed the tax case revisions with no costs incurred.