Dehydrated Milk Exemption: Skimmed milk powder remains exempt, and a contrary administrative clarification cannot override settled law.

Skimmed milk powder was treated as a dehydrated form of milk and therefore fell within the exemption granted for fresh milk under the notification issued under section 9 of the Andhra Pradesh General Sales Tax Act, 1957. Earlier judicial decisions declaring that position had attained finality, so a later Commissioner's clarification could not override the exemption or displace the binding legal view. The clarification was consequently inconsistent with the declared law and unsustainable, and the commodity remained exempt from sales tax.

---

---

Issues: Whether skimmed milk powder was entitled to exemption under the notification issued under section 9 of the Andhra Pradesh General Sales Tax Act, 1957, and whether the Commissioner's clarification denying such exemption was sustainable.

Analysis: The exemption granted in G. O. Ms. No. 1091 continued to operate in respect of sales of fresh milk. Earlier decisions of the Court had already held that skimmed milk powder is merely dehydrated milk and that this characterisation brings it within the exempted category. Those decisions had attained finality. A later clarification issued by the Commissioner could not override the exemption or nullify the effect of the binding judicial view. The clarification was therefore inconsistent with the earlier law declared by the Court and was unsustainable.

Conclusion: Skimmed milk powder is exempt from sales tax under the notification issued under section 9 of the Andhra Pradesh General Sales Tax Act, 1957, and the Commissioner's contrary clarification is invalid.

Ratio Decidendi: Where a commodity is judicially determined to be a dehydrated form of an exempted item, a subsequent administrative clarification cannot take it out of the exemption unless the governing notification is lawfully altered.

---