Rational classification under Article 14 upheld for taxing skimmed milk powder and UHT milk separately from exempt milk products.

A constitutional equality challenge to item 58 of Schedule IV under the Andhra Pradesh Value Added Tax Act failed because the Legislature could validly classify fresh milk and pasteurised milk separately from skimmed milk powder and UHT milk. The Court treated the issue as one of rational classification under Article 14, not whether the latter products were forms of milk. Since skimmed milk powder and UHT milk were placed in a distinct statutory entry and the differentiation was not shown to be arbitrary or unconstitutional, the taxable entry was upheld and the exemption for fresh and pasteurised milk remained intact.

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Issues: Whether item 58 of Schedule IV of the Andhra Pradesh Value Added Tax Act, which levied tax on skimmed milk powder and UHT milk while item 16 of Schedule I exempted fresh milk and pasteurised milk, was unconstitutional as violative of Article 14 of the Constitution of India.

Analysis: The impugned levy was examined only on the touchstone of equality. The challenge was that skimmed milk powder and UHT milk were merely forms of milk and therefore could not be singled out for tax when fresh milk and pasteurised milk were exempt. The Court held that the real question was not whether those products were milk, but whether the Legislature could place fresh milk and pasteurised milk in one exempt category and skimmed milk powder and UHT milk in another taxable category. Since the Legislature had made a separate statutory entry for skimmed milk powder and UHT milk, and the classification was not shown to be arbitrary or unconstitutional, the tax entry was upheld.

Conclusion: The classification was held to be valid and the challenge to item 58 of Schedule IV failed.

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