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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the product sold as "Amul Masti Spiced Buttermilk" was buttermilk falling within Serial No. 25 of Schedule I of the Uttarakhand Value Added Tax Act, 2005 and therefore exempt from tax.
Analysis: Serial No. 25 of Schedule I exempts buttermilk and curd. The manufacturing process showed that pasteurized toned milk was inoculated with culture to form curd, water was added to reduce viscosity, and masala was added thereafter. The product was not shown to be anything other than buttermilk with masala added. The fact that no butter or fat was separately removed from curd did not alter the character of the end product, because buttermilk is essentially milk product from which butter or fat is absent or negligible, and adding water to curd to reduce thickness is consistent with its traditional preparation. The distinction drawn by the Tribunal between the product and ordinary buttermilk was not accepted, and the reference to UHT processing did not create any separate taxable category under the statute.
Conclusion: The product was held to be buttermilk and therefore exempt under Serial No. 25 of Schedule I of the Uttarakhand Value Added Tax Act, 2005.
Ratio Decidendi: Where the commercial and manufacturing characteristics of a dairy product show that it is buttermilk, the product remains exempt as buttermilk notwithstanding added flavouring or processing steps that do not change its essential identity.
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