TMI Blog1999 (12) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... ilk powder falling under item 103(viii) of the First Schedule to the Act. Rs. 33,695 taxable at 10 per cent. (b) Mis-classified multi-point goods Rs. 2,796 taxable at 5 per cent Further, by a separate order, a penalty of Rs. 5,790 was levied under section 12(5)(iii) of the Act for not reporting the correct taxable turnover and paying tax thereon. 3.. The petitioner preferred appeals against the orders levying tax and penalty and the first appellate authority by a common order, held that the decisions in State of Tamil Nadu v. Indodan Milk Products [1980] 45 STC 498 (Mad.) and Indodan Milk Products Ltd. v. Commissioner of Sales Tax, U.P [1974] 33 STC 381 (All.)[FB] relied on related to condensed milk and that according to the substituted entry by Act 39 of 1983 from July 1, 1983, milk food including milk powder is taxable as per entry 103 of the First Schedule and therefore, levy of tax at 10 per cent is in order. As regards section 12(5)(iii) penalty, the quantum was reduced to Rs. 1,930 being 50 per cent of tax due. 4.. In the second appeal, the Appellate Tribunal also upheld the levy of tax by following the ratio of the decision in Milk Food Limited v. Commercial Tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Schedule to the Act with effect from July 1, 1983 reads as follows: "S. No. Description of the goods Point of levy Rate of tax (per cent) 103 (i) Biscuits; At the point of first sale in the State (ii) Toffees; (iii) Chocolates; (iv) Confectionery; (v) Butter; (vi) Ghee; (vii) Cheese; (viii) Milk foods including milk powder; "S. No. Description of the goods Point of levy Rate of tax (per cent) (ix) Condensed milk; and (x) Foods including preparations of vegetables, fruits, milk, cereals, flour, starch, birds eggs, meat and meat offals, animal blood, fish, crustaceans and molluses, which are sold under any brand name registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958). 10 The exemption notification in No. II(1)/CTRE/69/81 dated January 3, 1981 reads as follows: "In exercise of the powers conferred by sub-section (1) of section 17 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), the Governor of Tamil Nadu hereby exempts all sales of paddy (rice in husk), rice (husked paddy), cholam, cumbu, ragi, thinai, varagu, samai and kudiraivali, rice products (for example rice flour and rice bran), wheat, fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect from July 1, 1983. Therefore, the decisions relied on by the learned counsel for the assessee, are not relevant in the context of specific entry 103 of the First Schedule to the Act. As regards exemption, it is seen that only "fresh milk, recombined milk and milk drink with or without any addition thereto for being sold as a beverage" is exempt from tax. Having regard to the expression of "milk" used as a beverage in the notification in the context of immediately preceding items, namely, cereals such as paddy, rice, wheat, it is clear that what was meant or intended was fresh milk or recombined milk either with or without the addition of flavour or sugar but used as a beverage only. Thus, milk powder is clearly excluded from the Notification No. II(1)/CTRE/69/81 dated January 3, 1981. 12.. Similarly, the reduction in rate of tax in Notification No. II(1)/CTRE/47(c)/86 dated March 17, 1986 from 10 per cent to 4 per cent is "on the sale of milk food including baby milk foods only". While entry 103(viii) of the First Schedule to the Act specifies the goods as "milk foods including milk powder", the reduction in tax notification does not specify "milk powder", but confines to "m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India reported in AIR 1976 SC 2221 and referred to in Commissioner of Sales Tax v. Agarwal Co. [1983] 52 STC 117 (Bom) at page 119, which reads as follows: "The Supreme Court in that case was concerned with the interpretation of various entries in the Central Excises and Salt Act, 1944, and a notification issued thereunder, which entries are very different from the present entry in the Bombay Sales Tax Act, 1959. In view of the specific entries in that Act and the notification, the Supreme Court held that the entry relating to condensed milk did not cover condensed skimmed milk. In Healthways Dairy Products Co.'s case AIR 1976 SC 2221, the Supreme Court was considering item 1B of the First Schedule to the Central Excises and Salt Act, 1944, whereunder 10 per cent ad valorem duty was levied on 'prepared or preserved foods put up in unit containers and ordinarily intended for sale including preparations of..........milk.................'. By an exemption notification, certain items were exempted from this levy. From this exemption, however, certain specified items were excluded. Among these items so excluded, the relevant items which the Supreme Court considered were items 12 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to goods or persons for limited period or with the specific objective, etc. That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact, an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification or inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. " 16.. Thus, following the ratio of the decision of the Supreme Court cited above and for the reasons explained already, we hold that levy of tax on first sale of milk powder under entry 103(viii) of the First Schedule to the Act at 10 per cent is quite in order. 17.. As regards penalty under section 12(5)(iii) of the Act, as rightly held by the Appellate Tribunal, book turnover is the basis of assessment. As the book turnover was not disclosed as taxable turnover even after being pointed out in the pre-assessment notice, and no revised return was filed and tax paid before final assessment so as to escape from penalty, as contemplated in the decision of the Madras High Court reported in State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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