LI Network
Published on: 18 August 2023 at 12:15 IST
The Himachal Pradesh High Court has ruled that ‘milk cream‘ cannot be considered synonymous with ‘milk’. A bench comprising Chief Justice M.S. Ramachandra Rao and Justice Ajay Mohan Goel dismissed the revision petition filed by the Gujarat Co-Operative Milk Marketing Federation Ltd., asserting that the popular interpretation of ‘milk cream’ as distinct from milk should prevail, rather than a narrow scientific or technical interpretation.
The appellant, a registered dealer dealing in milk products, edible oils, etc., contended that their “milk cream” should be treated as fresh milk, claiming it retains about 25% cream content. The appellant insisted that since they haven’t added any new elements, the nature of the product remains unchanged.
However, the Excise and Taxation Commissioner argued that milk cream, neither being fresh milk, pasteurized milk, nor separated milk, should be taxed at rates of 12.5% or 13.75%.
The Himachal Pradesh Tax Tribunal had previously upheld this view, emphasizing that milk cream and milk are compositionally distinct.
The High Court, therefore, upheld the tax demand on milk cream, asserting that the common understanding of these terms supported their differentiation.
The court noted that a consumer seeking to buy milk cream would not simply ask for milk, demonstrating the distinctiveness of the two products.
The Court’s decision clarifies the tax classification of “milk cream” as a separate item from “milk,” and has implications for taxation and trade regulations.
