Milk exemption does not cover powdered milk; retrospective exclusion and sales tax notification were upheld as valid.

"Milk" in item 11 of Schedule I to the Bengal Finance (Sales Tax) Act, 1941 was construed in its ordinary and common parlance sense as milk in its natural liquid form, so powdered milk was treated as a distinct milk product and not exempt as milk simpliciter. On that basis, the 1955 notification issued under the West Bengal Sales Tax Act, 1954 was upheld as valid because powdered milk remained taxable under the earlier law. The 1983 retrospective amendment excluding powdered or condensed milk was also sustained as a clarificatory fiscal measure, and the constitutional challenge under Articles 14 and 19(1)(g) failed.

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Issues: (i) whether milk and powdered milk are identical commodities and whether powdered milk falls within the exemption for milk in item 11 of Schedule I to the Bengal Finance (Sales Tax) Act, 1941; (ii) whether the notification dated May 1, 1955 issued under section 25 of the West Bengal Sales Tax Act, 1954 was valid; (iii) whether the retrospective amendment made in 1983 excluding powdered or condensed milk was arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India.

Issue (i): whether milk and powdered milk are identical commodities and whether powdered milk falls within the exemption for milk in item 11 of Schedule I to the Bengal Finance (Sales Tax) Act, 1941

Analysis: The expression "milk" was construed in its ordinary and common parlance sense and in the context of the Schedule. Milk in its natural liquid form was held to be the commodity exempted by the entry. Powdered milk was treated as a milk product and not as milk simpliciter, since dehydration changes its characteristics, appearance and commercial identity. The Court also held that the legislative setting in 1941 supported a narrow meaning limited to milk in its natural form.

Conclusion: The issue was decided against the applicants and in favour of the Revenue.

Issue (ii): whether the notification dated May 1, 1955 issued under section 25 of the West Bengal Sales Tax Act, 1954 was valid

Analysis: Section 25 could be invoked only where the commodity was liable to taxation under the Bengal Finance (Sales Tax) Act, 1941. Since powdered milk was held not to be covered by the exemption for milk under the 1941 Act, it was a commodity capable of being validly notified under the 1954 Act. On that footing, the notification was within jurisdiction and operative.

Conclusion: The notification was held to be valid and the issue was decided in favour of the Revenue.

Issue (iii): whether the retrospective amendment made in 1983 excluding powdered or condensed milk was arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India

Analysis: In view of the finding on the principal issue, the amendment was treated as clarificatory in nature and not unconstitutional. The retrospective operation was upheld as a valid legislative exercise in fiscal matters.

Conclusion: The constitutional challenge failed and the issue was decided against the applicants.

Final Conclusion: The applications failed in their entirety, the challenged tax treatment of powdered milk was upheld, and no relief was granted to the applicants.

Ratio Decidendi: Where a sales tax exemption entry uses the word "milk" without qualifying language, it refers to milk in its natural form in common parlance and does not extend to powdered milk, which is a commercially distinct milk product.

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