Milk product exemption applies to cheese absent express taxation under the later sales tax notification.

Cheese, as a product of milk or curd, was treated as exempt from sales tax under the Rajasthan Sales Tax Act exemption entry rather than taxed under the residuary entry. The court applied the ordinary rule of construction that products derived from exempt goods remain exempt unless the taxing entry or notification expressly brings them to tax. The omission of the phrase "milk products" from the substituted exemption entry did not by itself show an intention to withdraw exemption from all other milk derivatives, and the later notification taxing ghee and butter did not extend to cheese. Cheese was therefore held exempt.

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Issues: Whether cheese, being a product of milk or curd, was exempt from sales tax under the exemption entry in the Schedule to the Rajasthan Sales Tax Act, 1954, or was taxable under the residuary entry in the tax notification dated March 8, 1969.

Analysis: The exemption entry as substituted with effect from March 6, 1964 specifically mentioned fresh milk, dahi, khoa and cream, but the later notification dated March 8, 1969 specifically imposed tax on ghee and butter while making no specific reference to cheese. The omission of the words "milk products" in the substituted exemption entry did not by itself show an intention to withdraw exemption from all other milk products. In the absence of any contrary intention in the taxing notification, the ordinary rule of construction applied that products of exempted goods remain exempt unless expressly brought to tax. Cheese, being admittedly a product of milk or curd, therefore fell within the exemption.

Conclusion: Cheese was held to be exempt from sales tax and not taxable under the residuary entry.

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