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2015 (5) TMI 1047 - RAJASTHAN HIGH COURT

2015 (5) TMI 1047 - RAJASTHAN HIGH COURT - [2015] 86 VST 108 (Raj) - Classification - Whether the ice-cream is a milk product as per appellant exempt under Salex Tax Act or not as per Revenue exiqible to tax - Held that:- ice-cream can certainly be said to be a product of a milk and certainly would be covered within the definition of a milk product, dahi (curd), khoa and cream. It is true that ice-cream as such is not mentioned anywhere but when ice cream is prepared basically by ingredient of m .....

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Each year is different and the Tribunal cannot come to a conclusion that the same rate would apply for all times to come.

Therefore, when cheese, paneer, lassi, shrikhand and yogurt can be said to be items which are being produced with the main ingredient being milk so also on the same analogy, ice-cream in my humble opinion, would also fall within the same category and would thus, be exempt and therefore, finding reached by the Tax Board, is required to be reversed. Even as per commo .....

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of the Rajasthan Sales Tax Tribunal, Ajmer, in Appeal No. 8/88 dated November 6, 1992. The matter pertains to the assessment years 1982-83 and 1983-84. The present petition was admitted on the following questions of law: "(i) Whether the 'ice cream' is an exempted item of goods under exempted entry dated March 6, 1964 or not with amended entry dated March 9, 1966 ? (ii) Whether the 'ice cream' is a milk product or not? (iii) Whether the Tribunal is competent to decide the m .....

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ssing officer was of the view that under the notification dated March 6, 1964, ice-cream is not defined and therefore, it is not a milk product and thus is exigible to tax under the Rajasthan Sales Tax Act and accordingly levied tax at eight per cent. However on an appeal filed, the Deputy Commissioner (Appeals) was satisfied with the arguments advanced by the assessee and held that it is a milk product, however, the Deputy Commissioner (Appeals) directed to levy tax at five per cent. as against .....

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tax laws, then on the same analogy the ice-cream should also fall within the category as a milk product. He contended that ice-cream is formed by milk and cream put together and when milk and cream are mixed and placed in deep freezer, it becomes an ice cream and thus enures for exemption. He further contended that when ice cream melts what remains is basically milk and cream. He further contended that when fresh milk, dahi (curd), khoa and cream was exempt from the levy of sales tax then ice-c .....

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specific entry which is relevant for the years in dispute read as under: "Fresh milk (whether whole or the fat contents of which have been removed or reduced), dahi, khoa and cream." He relied upon the judgments in the case of Assistant Commercial Taxes Officer v. Murli Brothers [1989] 75 STC 72 (Raj); [1989] 5 RTJS 285, Kwality Ice Cream Company and Restaurant v. Sales Tax Officer, New Delhi [1974] 34 STC 396 (Delhi), Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), .....

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er contended that it will basically fall in the category of "cooked food" as certain processes are involved in preparation of an ice-cream and after mixing of various products, ice-cream is prepared and once it fall within the category of "cooked food", then certainly it is liable to tax as "cooked food". She further contended that plain, simple meaning is required to be seen while analysing a matter like this and once the Legislature did not include ice- cream as a .....

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ales Tax v. Hira Ice Candy [1979] 44 STC 158 (All). I have considered the arguments advanced by the counsel for the parties and perused the material available on record. In my view, ice-cream can certainly be said to be a product of a milk and certainly would be covered within the definition of a milk product, dahi (curd), khoa and cream. It is true that ice-cream as such is not mentioned anywhere but when ice cream is prepared basically by ingredient of milk and cream, I have no hesitation in h .....

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as specifically mentioned therein. Thereafter, that entry was substituted with effect from March 6,1964 by mentioning therein specifically milk, dahi, curd, khoa and cream and the words milk products, does not find a place therein. The question is whether this alone is sufficient to hold that the exemption granted to milk products other than ghee and butter which have been shown specifically as exigible to tax in the notification dated March 8, 1969, ceased to be so exempt from the payment of ta .....

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This being so, the ordinary rule of construction that products of exempted goods would also be exempt unless a contrary intention appears must be applied. No contrary intention to tax the products of milk or curd other than ghee and butter appears from the aforesaid notification dated March 8, 1969. This being so, cheese, which is admittedly the product of milk, or curd, must be held to be exempt from payment of tax by virtue of this entry. Reference may be made to the decision of the Supreme C .....

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to be exempt from payment of tax. The Delhi High Court in the case of Kwality Ice Cream Company and Restaurant [1974] 34 STC 396 (Delhi) considering a case of ice-cream held as under (pages 406 to 408 in 34 STC): "It has been finally contended on behalf of the respondents that if all varieties of ice-cream are treated as milk products and, therefore, exempt from assessment, then even ice-cream, which has no milk content or very little milk content in it, will also be eligible for exemption .....

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led a milk product. There would, however, be some difficulty in respect of ice-cream which while having some milk content, however, does not conform to the standards prescribed under the Prevention of Food Adulteration Rules. But such a difficulty exists in the cases of other entries in the Second Schedule. For instance, standards are prescribed for fresh milk both of cow or buffalo. Fresh milk which is sold by a vendor may not conform to such standards and might be adulterated by him by the add .....

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nt to sales tax. So far as the writ petitions are concerned, the same are accepted and the assessment orders levying sales tax on the sale of the ice-cream by the petitioners are quashed . . . The honourable Khanna, J. added: In the present case, the words 'fresh milk, whole or separated' provide a complete description of what was intended to be exempted. There is no vagueness left about it. Apart from that, 'milk products' were also considered to deserve the exemption. That is w .....

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h is an unambiguous and clear expression well-known and easily understood by the common man. The attempt of the Revenue to call to its aid a technical rule of interpretation, in order to understand a well-understood expression, and thereby to divert one's attention from its natural meanings and in this process to deny ice-cream, which is well-understood to be a milk product, the exemption it enjoys under the relevant entry in the schedule, is without any justification. The entry has to be in .....

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questions posed in the references have to be answered in the manner in which they have been answered by him, without any order as to costs." The honourable apex court in the case of Pio Food Packers [1980] 46 STC 63 (SC) was considering a case where pineapple fruit was processed into pineapple slices for the purpose of being sold in sealed cans and came to the conclusion that although a degree of processing is involved in preparing pineapple slices from the original fruit, the commodity co .....

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xpressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they are understood in that constitutes definitive index of legislative intentions when the statute was enacted." The honourable apex court, time and again, has held that while interpreting the entry for the purposes of taxation, recourse should not be made to the scientific meaning of the terms or expressions .....

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ere assertion in that regard is of no avail. It further observed that there should be material to enter appropriate finding in that regard and the material may be either oral or documentary. It is for the taxing authority to lay evidence in that behalf even before the first adjudicating authority. In so far as the classification of goods is concerned, the honourable apex court in the case of HPL Chemical Ltd. [2006] 6 RC 508; [2006] 5 SCC 208 has held that classification of goods is a matter rel .....

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combination thereof or from cream, and/or other milk products, with or without the addition of cane sugar, (dextrose, liquid glucose and dried liquid glucose). Maltodextrin, eggs, fruits, fruit juice, preserved fruits, nuts, chocolate, edible flavours and permitted food colours. It may contain permitted stabilizer and emulsifiers not exceeding 0.5 per cent. by weight. The mixture shall be suitably heated before freezing. The product shall contain not less then 10 per cent. milk fat, 3.5 per cent .....

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