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TMI Blog2003 (8) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... on a scrutiny of the assessment records for the year 1991-92, it is seen that the assessee had effected inter-State purchase of skimmed milk powder for Rs. 65,41,200 and considering the opening and closing stock of the above item, there is sale or consumption of skimmed milk powder valued at Rs. 64,57,934. The Deputy Commissioner also observed that as the assessee had sufficient purchase of fresh milk, it cannot be presumed that the milk powder was used for making milk and that the society had not produced any evidence to show that skimmed milk powder purchased was used for making milk. It was further stated that fresh milk is exempted from tax under S.R.O. No. 342 of 1963. The Deputy Commissioner, therefore, was of the view that the turnover of Rs. 65,41,200 representing the purchase turnover of skimmed milk powder has escaped assessment. The assessee filed objection to the notice issued by the Deputy Commissioner. However, rejecting the said objections the Deputy Commissioner passed the order dated September 25, 1996 (annexure B) setting aside the assessment order for the year 1991-92 and remanding the matter to the assessing authority for fresh disposal in accordance with l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owder in the taxable turnover. However, the Deputy Commissioner, on verification of the assessment records, noted that the assessee had effected inter-State purchase of skimmed milk powder for Rs. 65,41,200 during the assessment year and on verification of the opening stock and closing stock of this item, it was found that the assessee had disposed of skimmed milk powder to the tune of Rs. 64,57,934 during the assessment year concerned and that the assessee had not disclosed this transaction in the accounts. The Deputy Commissioner also noted that the assessee had not produced any evidence to show that skimmed milk powder had been used for making milk and further that only fresh milk is exempted from tax. The Deputy Commissioner further noted that the assessing authority had omitted to include the turnover of skimmed milk powder in the taxable turnover. It is in this view of the matter, the Deputy Commissioner had set aside the assessment and directed the assessing authority to redo the assessment afresh and in accordance with law. 5.. The contention of the assessee is that the skimmed milk powder purchased by the assessee from outside the State was not sold as such, but had use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries in the First, Second and Third Schedules to the Act during the relevant assessment year, it is exigible to tax under the Act as a multi point item under section 5(1)(ii) of the Act. It is in those circumstances, fresh milk is exempted from tax as item No. 24 in the Notification S.R.O. No. 342 of 1963. Admittedly, the petitioner had purchased skimmed milk powder from outside the State by issuing C form declaration provided under the Central Sales Tax Act, 1956. One of the conditions for issuance of the declaration in C form is that it must be an item specified in the certificate of registration issued to the dealer. Another condition is that the goods purchased by issuing C form is intended either for resale by him or for use by him in the manufacture or processing of goods for sale. In the assessee's case as already noted the skimmed milk powder purchased by issuing C form has been used for processing the fresh milk for sale and therefore the provisions of section 8(3)(b) of the Central Sales Tax Act, 1956 and the declaration in C form had been satisfied. 8.. As we have already noted, milk powder has been separately dealt with under entry 122 of the First Schedule to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in the judgment Pooja Milk Foods (P) Ltd. v. State of Kerala dated 4th August 2003 in O.P. No. 5975 of 2002 and connected cases distinguished the decision in Ernakulam Regional Co-operative Milk Producers Union's case (2001) 9 KTR 459 in paragraph 12 of the judgment as follows: According to the plain language of the statute, the taxable event is the passing of property in goods. Under the provision, the sale of 'fresh milk' is not taxable. If the entry is literally construed, milk may be treated as fresh only at the moment it is 'drawn from the cow'. Thus, even when it is sold after an hour, it may be contended that it was already an hour-old. It was not fresh at the time of sale. Such could not be the intention of the Legislature. In fact, while granting exemption in respect of the sale of fresh milk, the obvious intention was that the benefit shall be admissible if the milk was fresh at the time of its reaching the consumer. It is to ensure freshness that the dealer has to subject milk to a process of heating and cooling. Pasteurisation only preserves the product and does not let milk go sour or stale before it reaches the customer. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Schedule to the Act. As already noted, item 24 of the Notification S.R.O. No. 342 of 1963 only exempts fresh milk, which according to us will not take in any item falling under entry 122 of the First Schedule to the Act. The items considered in entry 122 are only products of milk and not milk itself. 11.. In fairness to the counsel for the assessee we will refer to a decision of the Andhra Pradesh High Court in State of Andhra Pradesh v. Guntur District Milk Producers Co-operative Unit Ltd. [1990] 79 STC 211. In that case the division Bench was considering a case where the Andhra Pradesh Government by a notification issued under section 9 of the Andhra Pradesh General Sales Tax Act, 1957 exempted the sale of pasteurised milk by the Guntur District Milk Producers Co-operative Unit Limited, Vadlamudi, from the levy of sales tax payable under the said Act with effect from 1st August, 1978 . For the assessment years 1982-83 and 1983-84 the society sold a certain quantity of skimmed milk powder. Tax was levied on the turnover of skimmed milk powder treating it as different goods. In the appeal the Tribunal held that skimmed milk powder is nothing but milk and, therefore, covered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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