Common parlance test excludes milk cream from milk exemption; suo motu revisional power remains valid on received information.

Revisional power under Section 46(1) of the Himachal Pradesh Value Added Tax Act, 2005 could be exercised suo motu on information received from the department or the assessee, so long as the authority independently chose to act on it; the jurisdictional objection therefore failed. In interpreting the exemption entries for fresh milk, pasteurized milk, separated milk and other exempt milk products, the Court applied the common parlance and commercial understanding test and held that milk cream is a distinct product from milk. As no specific exempt entry covered milk cream, the product did not qualify for tax exemption and was held taxable. The revision consequently failed on merits.

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Issues: (i) Whether the revisional authority could validly exercise suo motu revisional power on information received from the department and the assessee; (ii) Whether milk cream or low fat fresh cream is covered by the tax-free entries for fresh milk, pasteurized milk, separated milk or other exempt milk products under the Himachal Pradesh Value Added Tax Act, 2005.

Issue (i): Whether the revisional authority could validly exercise suo motu revisional power on information received from the department and the assessee

Analysis: The revisional power under Section 46(1) of the Himachal Pradesh Value Added Tax Act, 2005 is exercisable by the authority on its own motion for examining legality or propriety of subordinate proceedings. Information triggering such action may come from any source, including the department or an assessee. The receipt of information does not take away the character of suo motu action if the authority independently chooses to act on it.

Conclusion: The objection to jurisdiction failed, and the suo motu revision was held to be valid.

Issue (ii): Whether milk cream or low fat fresh cream is covered by the tax-free entries for fresh milk, pasteurized milk, separated milk or other exempt milk products under the Himachal Pradesh Value Added Tax Act, 2005

Analysis: The Court applied the common parlance test and the commercial or trade understanding of a taxing entry. It held that where no statutory definition compels a technical meaning, the product must be understood as ordinarily understood by persons dealing in it. Milk cream is a distinct product from milk in ordinary market understanding, and the absence of a specific exempt entry for milk cream supported taxation. The Tribunal's view that the exemption was intended for milk and not milk products was accepted, and the lower rate applied by the Tribunal was left undisturbed.

Conclusion: Milk cream was held not to fall within the tax-free entries for milk, and it was held taxable.

Final Conclusion: The revision failed on merits, and the assessee was not entitled to exemption for milk cream under the claimed entries.

Ratio Decidendi: In interpreting taxing entries, the ordinary commercial meaning governs unless the statute indicates otherwise, and a product that is commercially distinct from exempt milk does not fall within the exemption merely because it is derived from milk.

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