M.C.Desai, C.J. - (1.) This and connected references arise out of three statements of cases submitted by the Judge (Revisions), Sales Tax, U.P., to this Court; the questions of law that arise from them are as follows: 1.Whether powdered milk and condensed milk are milk within the meaning of Section 4 and therefore exempt from tax or milk products sold in sealed containers within the meaning of the notification and therefore taxable ?
(2.) Whether on the facts and circumstances of the case the applicants are dealers within the meaning of Section 2(c) of the U.P. Sales Tax Act ?
(3.) Whether on the facts and circumstances of the case the sale took place within the State of Uttar Pradesh ? 2. The facts as they are stated in the statements are these. The assessee is a dealer in condensed milk and powdered milk sold in sealed containers with its office in Calcutta. It has no office in Uttar Pradesh. It enters into contracts of sale of condensed milk and powdered milk with customers residing in Uttar Pradesh and sends them by train to Uttar Pradesh. The railway receipts are prepared in the name of the assessee as consignor and consignee both. At the destinations the goods are taken delivery of either by the assessee's representatives in Uttar Pradesh who then sell them by going from door to door or by the customers through a bank against payment. Delivery to customers through a bank against payment means that the assessee sends the railway receipts to its bankers in Uttar Pradesh after endorsing them in their favour and they deliver them to the customers after receiving payment from them and endorsing them in their favour. On these facts the assessee has been assessed to sales tax as a dealer. It claimed exemption from the sales tax under Section 4(1) on the ground that what it sold is "milk". This contention was repelled by the Sales Tax Authorities who held that condensed milk and milk powder are not "milk" within the meaning of Section 4(1) and that they are milk products but are not exempt from assessment because they are sold in sealed tins. 3. What is exempted under Section 4(1) is "the sale of water, milk, salt, newspapers and motor spirit" and the question is whether milk powder and condensed milk are "milk" within the meaning of this provision. Though they are prepared from milk they are certainly not milk. Milk is exempted from being taxed on account of its being an article required universally and daily ; the same cannot be said about condensed milk and powdered milk which cannot be equated with water, salt, newspaper and motor spirit which have been exempted under the Act. As was observed by this Court in Miscellaneous Case No. 295 of 1954 (Industrial and Commercial Service, Allahabad v. Commissioner of Sales Tax, [1963] 14 S.T.C. 299 the word "milk" must be interpreted in the sense of an article required universally and daily. Under Notification No. S.T. 119/ X-928, dated 7th June, 1948, the State Government have also exempted from being taxed "milk products such as chhena, dahai, khoa, butter and cream but excluding sweetmeats and products sold in sealed containers". This notification distinguishes "milk" from milk products and includes khoa and cream among milk products. If they are milk products there is no reason for saying that condensed milk and milk powder also are not milk products. Milk powder is produced simply by evaporating all water contents of milk; it differs from khoa only in the extent to which the water contents are evaporated. Nothing is added when- milk powder is prepared and nothing is added when khoa is prepared. If khoa is treated as milk product, milk powder also must be. Condensed milk is prepared from milk after adding sugar to it; when sugar is added to milk, the product can hardly be said to be still milk and it is undoubtedly a milk product. Since the assessee sells these in sealed containers it is not exempt from paying sales tax on their turnover. Question No. 1 is, therefore, answered in the negative and against the assessee.;