Milk shake exemption under sales tax notification upheld where the product retained milk's essential character and commercial identity.

Milk shake sold by the assessee was prepared by a simple mechanical process from milk with sugar and flavouring, without any manufacturing change in its essential composition. The decisive point was that milk retained its essential character in the milk shake and was commercially understood as akin to milk; it was also treated as a milk product within the exemption entry for milk and milk products. On that basis, milk shake was not an unclassified taxable article and fell within the sales tax exemption under Notification No. ST-3506/X dated 10 May 1956.

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Issues: Whether milk shake sold by the assessee was an unclassified taxable item or fell within the exemption for milk and milk products under the sales tax notification.

Analysis: Milk shake was found to be prepared by a simple mechanical process from milk with sugar and flavouring, without any manufacturing change in its composition. The decisive consideration was that milk retained its essential character in the form of milk shake and that milk shake was commercially understood as akin to milk. Even apart from being milk, it was treated as a milk product within the scope of the exemption entry covering milk and milk products.

Conclusion: Milk shake was not an unclassified article and was exempt from tax under Notification No. ST-3506/X dated 10th May, 1956.

Ratio Decidendi: Where a commodity retains its essential character after a simple process and falls within an exemption for the principal product and its milk products, it cannot be treated as an unclassified taxable article.

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