Milk sold after adding powder and butter can still qualify as exempt milk under trade tax law.

Milk sold after adding milk powder and white butter to improve fat and SNF content remained "milk" for purposes of section 4(a) of the U.P. Trade Tax Act, 1948. The court treated "milk" as a generic term covering milk in its saleable forms when known in common parlance as milk, and held that the exclusion in Explanation (b) did not extend to the reconstituted or recombined product involved here. Relying on the earlier Full Bench view that condensed milk is also milk, the court accepted that the assessee had not manufactured a different taxable commodity and the sale continued to enjoy exemption.

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Issues: Whether milk sold after adding milk powder, white butter and similar ingredients to improve fat and SNF content remained "milk" and was exempt under section 4(a) of the U.P. Trade Tax Act, 1948.

Analysis: The assessment records showed that the assessee had added milk powder and white butter to purchased milk to achieve the required standard of fat and SNF, and not to manufacture a different product. The expression "milk" in section 4(a) was held to be a generic term covering milk in all forms when sold and known in common parlance as milk. The exclusion in Explanation (b) to section 4 did not extend to artificial, reconstituted or recombined milk of the kind involved in the case. The earlier Full Bench view that condensed milk is also milk was applied, and the Tribunal's finding that artificial milk had been manufactured was found to be on the record.

Conclusion: The milk sold by the assessee, even after addition of milk powder and white butter, remained milk and was exempt from tax under section 4(a) of the U.P. Trade Tax Act, 1948.

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