Condensed milk remains milk in common parlance; ordinary processing does not destroy its tax-exempt character.

Condensed milk is treated in common parlance as milk where ordinary processing leaves its essential identity intact; removal of water and concentration do not by themselves make it a different commodity, unlike goods such as ghee, butter, cream, chhena, or khoa. On that basis, it falls within the State exemption for milk and its turnover is not taxable under that provision. A separate exemption tied to sale conditions, such as exclusion of goods sold in sealed containers, is only a conditional exemption and does not amount to a general exemption for section 8(2A) of the Central Sales Tax Act. If condensed milk were only a milk product, it would not qualify on that ground.

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Issues: (i) Whether condensed milk is milk within the meaning of section 4(a) of the U.P. Sales Tax Act and therefore exempt from tax generally; (ii) whether, if condensed milk is treated as a milk product, its sale is nevertheless exempt from tax generally for the purposes of section 8(2A) of the Central Sales Tax Act.

Issue (i): Whether condensed milk is milk within the meaning of section 4(a) of the U.P. Sales Tax Act and therefore exempt from tax generally.

Analysis: The expression "milk" was held to bear its common parlance meaning and not to be confined to milk only in its natural state. Milk subjected to ordinary processes such as pasteurisation, skimming, or reduction of water content does not cease to be milk if its essential identity remains unchanged. Condensed milk was found to be milk in concentrated form, produced by removing water from fluid milk and preserving its essential character and use as milk. The Court distinguished milk products such as ghee, chhena, cream, butter, and khoa, which are essentially different commodities. Authorities dealing with conversion into different commercial commodities were considered but found not to displace the conclusion that condensed milk remains milk.

Conclusion: Condensed milk is milk within section 4(a) of the U.P. Sales Tax Act, and its turnover is exempt from sales tax generally.

Issue (ii): Whether, if condensed milk is treated as a milk product, its sale is nevertheless exempt from tax generally for the purposes of section 8(2A) of the Central Sales Tax Act.

Analysis: Under the relevant notification, milk products were exempt only when sold otherwise than in sealed containers. The explanation to section 8(2A) excludes exemptions that operate only in specified circumstances or under specified conditions from the category of general exemption. An exemption depending on whether the goods are sold in sealed containers is a conditional exemption and therefore not a general exemption for section 8(2A). On that footing, if condensed milk were merely a milk product, it would not qualify for the benefit of section 8(2A).

Conclusion: Condensed milk would not have been exempt generally under section 8(2A) merely as a conditioned milk product, but this does not affect the result because it was held to be milk itself.

Final Conclusion: The turnover of condensed milk was held to be outside Central sales tax because the commodity falls within the exempt category of milk under the State law.

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