Milk retains its exempt character even when condensed or powdered, and cannot be narrowed by a notification.

Condensed milk and powdered milk were held to retain the essential character of milk for entry 10 of Schedule I to the Gujarat Sales Tax Act, 1969, because the exempting entry had to be read in light of the legislative object of covering necessities. The words "whole", "separated" and "reconstituted" were treated as clarificatory, and a notification under section 49(2) could not narrow the statutory entry. Condensed milk was also found not to fall within "food-stuff" or "food provisions of all kinds" under entry 6 of Schedule III. The milk products were therefore exempt under entry 10 and not taxable under the alternative entries.

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Issues: (i) Whether condensed milk and powdered milk fall within the expression "milk, whole or separated or reconstituted" in entry 10 of Schedule I to the Gujarat Sales Tax Act, 1969; (ii) whether condensed milk is "food-stuff" or "food provisions of all kinds" within entry 6 of Schedule III to the Gujarat Sales Tax Act, 1969.

Issue (i): Whether condensed milk and powdered milk fall within the expression "milk, whole or separated or reconstituted" in entry 10 of Schedule I to the Gujarat Sales Tax Act, 1969.

Analysis: The expression in the exempting entry was read in the context of the legislative object of excluding necessities from tax. Milk, even when condensed or converted into powder form, retains its essential character as milk. The words "whole", "separated" and "reconstituted" were treated as clarificatory and not as limiting the scope of the word "milk". A notification under section 49(2) could not narrow the meaning of the statutory entry.

Conclusion: Condensed milk and powdered milk are covered by entry 10 of Schedule I, and the contrary view was rejected.

Issue (ii): Whether condensed milk is "food-stuff" or "food provisions of all kinds" within entry 6 of Schedule III to the Gujarat Sales Tax Act, 1969.

Analysis: The product was examined against the specific statutory classification and was found not to answer the description of food-stuff or food provisions in the relevant entry.

Conclusion: Condensed milk does not fall within entry 6 of Schedule III.

Final Conclusion: The references were answered in favour of the assessee by holding that the milk products in question are exempt milk under entry 10 and are not taxable under the alternative entries relied upon by the Revenue.

Ratio Decidendi: In interpreting an exempting entry, the statutory expression must be construed in light of the legislative object, and a product that retains the essential character of milk does not cease to be milk merely because it is condensed or powdered.

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