Ghova treated as a separate commodity from milk, attracting sales tax and sustaining penalty under the Tamil Nadu tax law.

Ghova was treated as a distinct commercial commodity from milk because the exemption notification covered only fresh milk, recombined milk and milk drinks sold as a beverage in liquid form. As ghova was an end-product obtained through processing of milk with added ingredients and sold in solid form, it fell outside the exemption and purchases from non-dealers attracted tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The penalty under section 12(5)(iii) was also sustained because the turnover was omitted from the return and tax was not paid before final assessment.

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Issues: Whether ghova is a different commercial commodity from milk and therefore liable to tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, and whether penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was justified.

Analysis: The exemption notification applied only to fresh milk, recombined milk and milk drinks sold as a beverage. The decisive factor was that the exemption was confined to milk in liquid form sold for consumption as a beverage. Ghova was found to be an end-product obtained by a manufacturing process from milk with added ingredients, and in solid form it was not a beverage. Since the purchases were from non-dealers, tax under section 7-A was attracted. As the turnover was not included in the return and tax was not paid before final assessment, the penalty was also upheld as reasonable.

Conclusion: Ghova was rightly treated as a different commodity from milk and was liable to tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was also sustained.

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