Court rules only milk powder marketed as baby food qualifies for exemption under specific entry.

The court ruled against the appellant, stating that only milk powder used or marketed as baby food qualifies for exemption under entry No. 7 of the notification dated May 31, 2003. The court emphasized the distinction between different types of milk powder and clarified that interpreting all milk powder under entry No. 7 would render entry No. 76 redundant. The appellant's argument based on legal precedents regarding skimmed milk powder was rejected, and the court deemed the charging of interest in subsequent demand notices as beyond the scope of the appeal. The appeal was dismissed without costs awarded.

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Issues: Whether milk powder was covered by entry No. 7 of the notification dated 31 May 2003 so as to entitle the assessee to exemption from tax.

Analysis: The entry exempted "baby foods including milk powder". The expression "including" had to be read in the context of the preceding words "baby foods". The exemption applied only to milk powder used or marketed as baby food and not to milk powder per se. Reading entry No. 7 to cover all milk powder would also render entry No. 76, dealing separately with skimmed milk powder in specified sales by Karnataka Milk Federation, redundant. The revisional authority therefore committed no error in holding that the assessee did not fall within the exemption.

Conclusion: The assessee was not entitled to exemption under entry No. 7 of the notification dated 31 May 2003, and the finding was in favour of the Revenue.

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