Kulfi treated as a milk product, not cooked food, and therefore exempt from tax under the notification.

Kulfi was held not to be "cooked food" because the expression in the taxing notification was confined to food cooked and taken as a meal, not every article prepared with heat. It was also held to be a milk product because milk remained its main constituent and the added ingredients only imparted sweetness and flavour. As a result, kulfi fell within the milk-product exemption and was not taxable under the later notification, so the assessee succeeded.

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Issues: (i) Whether kulfi is cooked food; (ii) Whether kulfi is a milk product exempt under the relevant exemption notifications and consequently not taxable.

Issue (i): Whether kulfi is cooked food.

Analysis: The process of making kulfi involves heating milk and then cooling and freezing it after adding sugar, dry fruits and essence. The expression "cooked food" in the relevant taxing notification was understood as food cooked and taken as a meal, and not every article subjected to heat in preparation. Kulfi does not answer that description.

Conclusion: Kulfi is not cooked food, in favour of the assessee.

Issue (ii): Whether kulfi is a milk product exempt under the relevant exemption notifications and consequently not taxable.

Analysis: The notification exempted milk and milk products, subject to specified exclusions. Kulfi is produced from milk, with milk as its main constituent, and the added ingredients only provide sweetness and flavour. It is therefore a milk product within the exemption entry, and the later notification did not alter the position material to the dispute.

Conclusion: Kulfi is a milk product exempt under the notification and is not taxable under the later notification, in favour of the assessee.

Final Conclusion: The reference was answered by holding that kulfi was outside the category of cooked food and within the exempt category of milk products, so the assessee succeeded.

Ratio Decidendi: A commodity is a milk product if it is produced from milk and milk remains its main constituent, and the phrase cooked food does not extend to every article prepared with the aid of heat unless it is cooked food in the ordinary meal sense.

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