Court classifies "Amul Tazza Milk" as pasteurised milk, exempt from tax under Kerala Sales Tax Act

The court held that "Amul Tazza Milk" should be classified as pasteurised milk under entry 23 of the Third Schedule to the Kerala General Sales Tax Act, exempt from tax liability. It rejected the classification as a milk product under entry 92 of the First Schedule, emphasizing that the addition of vitamins A and D does not alter the nature of the milk. The court underscored the distinction between milk products and fresh milk, directing the authorities to re-quantify the tax liability accordingly.

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Issues involved: Classification of "Amul Tazza Milk" u/s Kerala General Sales Tax Act, 1963 and Central Sales Tax Act, 1956.

Classification of "Amul Tazza Milk" as a milk product:
The petitioner, a co-operative society, claimed exemption on the sales turnover of "Amul Tazza Milk" as pasteurised milk u/s entry 23 of the Third Schedule to the Kerala General Sales Tax Act, 1963. However, the assessing authority classified it as a milk product u/s entry 92 of the First Schedule. The Tribunal upheld this classification based on the processing methods and addition of vitamins A and D. The petitioner contended that the milk should be considered pasteurised even with the added vitamins, retaining its identity. The court analyzed the definitions of pasteurised milk and milk products, emphasizing that the addition of vitamins does not change the nature of the milk. It concluded that the authorities misdirected themselves in classifying the product as a milk product, directing the re-quantification of tax liability treating "Amul Tazza Milk" as pasteurised milk u/s entry 23 of the Third Schedule.

Interpretation of relevant entries:
The court examined entry 92 of the First Schedule, encompassing milk products, and entry 23 of the Third Schedule, covering fresh milk including pasteurised, toned, or reconstituted milk. It highlighted the inclusive and exclusive nature of the entries, clarifying the distinction between milk products and fresh milk. By delving into the process of pasteurisation and the addition of vitamins A and D, the court determined that "Amul Tazza Milk" should be considered pasteurised milk under entry 23, exempt from tax liability. The judgment emphasized the importance of maintaining the product's identity despite processing methods, ensuring accurate classification for taxation purposes.

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