TMI Blog1991 (3) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... ll-cream powdered milk". M/s. Chunilal Mayachand Mehta is a dealer in these articles. It made an application under section 62 of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act") on May 15, 1978 to the Deputy Commissioner of Sales Tax for his determination whether tax was payable on the sales of the two products and, if tax was payable, then the rate thereof. The Deputy Commissioner, who heard that application, held that the two products were neither "milk, whole, separated or reconstituted" within the meaning of entry 10(i) of Schedule I to the Act, nor residuary goods covered by entry 13 of Schedule III to the Act, but were "food-stuff or food provisions" within the meaning of entry 6 of Schedule III to the Act. He held that the sales were subject to levy of sales tax at 5 per cent and general sales tax at 3 per cent and accordingly sales tax and general sales tax were payable at the rates specified against that entry. Against that determination, the assessee preferred an appeal to the Tribunal. The Tribunal was of the view that the words "milk, whole, separated or reconstituted" would reasonably mean only three categories or varieties of milk, viz., whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In Commissioner of Sales Tax v. Agarwal Co. [1983] 52 STC 117, the Bombay High Court was concerned with "skimmed milk powder". The question, which arose for consideration was, whether "skimmed milk powder" was covered by entry 36 in Schedule A to the Bombay Sales Tax Act, 1959. The said entry at the relevant time, was "milk, whole or separated or reconstituted". After considering how milk powder is produced from milk, the Bombay High Court held that milk powder is nothing except milk in powdered form or milk from which water has been removed and, therefore, milk would include milk in powdered form also. The Bombay High Court referred to the Full Bench decision of the Allahabad High Court in Indodan Milk Products Ltd. v. Commissioner of Sales Tax [1974] 33 STC 381 and that of the Madras High Court in State of Tamil Nadu v. Indodan Milk Products [1980] 45 STC 498, in which it has been held that condensed milk obtained by a process of dehydrating milk or taking water out of milk, so that milk can, with added preservative stand for a long time, does not cease to be milk, and has followed those decisions. It is not necessary to refer to those two decisions as the reasons given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that contention, he relied upon the decision of the Supreme Court in Healthways Dairy Products Co. v. Union of India AIR 1976 SC 2221. In that case the Supreme Court has observed that in common parlance, milk means the full-cream milk as milched from the cattle. It becomes skimmed milk when cream, i.e., fat is extracted from milk. Thereafter the skimmed milk which also can be called a form of preparation of milk is known as such. He submitted that, for the same reasons, condensed milk and milk powder should be regarded as milk preparations, particularly when they are also commonly understood as items of milk preparations. This judgment was considered and distinguished by the Bombay High Court in the case of Agarwal Co. [1983] 52 STC 117. We agree with the reasoning of the Bombay High Court and are also of the view that the said decision has no bearing on the questions which are to be decided in these references. It was also submitted by the learned Assistant Government Pleader that the State Government, in exercise of its powers under section 49(2) of the Act, has issued a notification exempting from payment of tax to the extent specified in the Schedule to the notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent from milk, and that the Legislature did not intend that the condensed milk should be understood as per the term used in section 4(a) of the U.P. Sales Tax Act. Rejecting this contention, the Allahabad High Court held that the notification issued by the State Government under section 3 of that Act did not have the effect of changing the scope of expression "milk" as used in the notification issued under section 4(a). It further held that the notification issued by the State Government could not be used for determining the scope of the expression "milk" as used by the Legislature under section 4(a) of that Act. All that the notification indicated was that the Government thought that the condensed milk was a milk product different from milk and for that reason it made a provision for its sale being taxed at a single point. In clear terms the Allahabad High Court held that opinion of the Government cannot be equated with the intention of the Legislature. We respectfully agree with the said observations and hold that the notification relied upon by the learned Assistant Government Pleader cannot have the effect of changing or restricting the meaning of the word "milk" as used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encouragement by way of exemption from payment of sales tax. If we interpret the entry as suggested by the learned Assistant Government Pleader, full-cream milk powder and full-cream condensed milk would lose protection of exemption for no good reason. We see no good reason why whole milk in its original liquid form should have an exemption and why it should not have an exemption when it is condensed or converted into powder form. To us it appears that the words "whole", "separated" and "reconstituted" have been used in entry 10 out of abundant caution and not for the purpose of restricting the meaning of the word "milk" as contended by the learned Assistant Government Pleader. The Legislature appears to have used those words to clarify that not only the whole milk in its original liquid form but even separated milk and reconstituted milk are also covered by that entry. For example, in absence of the word "reconstituted" in the entry, it could have been urged that since reconstituted milk is not milk in its original form but is a liquid prepared out of milk powder, it cannot be regarded as milk. In our opinion, to avoid such contentions, the Legislature thought it fit to use the ..... 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