THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P.No.496 OF 2006 ORDER : (per Hon’ble Sri Justice P.Sam Koshy)

Heard Mr.A.V.Raghu Ram, learned counsel for the petitioner and Mr.T.Chaitany Kiran, learned counsel representing Mr.Swaroop Oorilla, learned Special Government Pleader for State Taxes, for the respondents. Perused the record.

2. The instant is writ petition filed assailing order passed by the Commercial Tax Department, composite government of Andhra Pradesh proposing to impose tax on the flavored milk manufactured by the petitioner.

3. According to the petitioner they are engaged in the business of selling milk and milk products which includes toned milk, standardized milk and whole milk. In addition, they also sell curd, flavored milk, skimmed milk, butter, ghee, paneer etc., 4. The respondent Commercial Tax Department initiated a proceeding under Andhra Pradesh VAT Act contending that the petitioner has not disclosed the correct amount of value added tax while filing the returns and some of the milk products like flavored milk was not exempted from tax under Schedule-I of the Andhra Pradesh VAT Act. It is this proceeding which has been initiated by the respondents which is under challenge in the present writ petition.

5. The contention of the petition is that the matter has no longer res integra as there have been series of decisions by this High Court like State of Andhra Pradesh v. A.P.Dairy Development Corporation, 24 AP STJ 114, State of Tamil Nadu v. Indodan Milk Products Limited, 45 STC page 498, W.P.No.9784 of 2017, decided on 27.03.2017 and most of these judgments were following the decision rendered by the VAT Tribunal earlier in the case of Masqati Dairy Products v. State of Andhra Pradesh, 2007 44 APSTJ 36 (AP), wherein in all these proceedings the court/tribunal has taken a categorical stand that flavored milk also stands exempted from the payment of tax in terms of Entry-16 of Schedule I of the Andhra Pradesh VAT Act.

6. Though the learned counsel for the respondent tried to oppose the petition relying upon a decision of the High Court for the State of Andhra Pradesh in the case of Krishna District Milk Producers v. State of Andhra Pradesh, in tax revision case Nos.190 & 209 of 2002 together decided on 12.10.2022, but on closer perusal of the facts of those cases, we find that the said judgment of the High Court for the State of Andhra Pradesh was under entirely different factual background and also under different statutory provision. We find that power of this High Court i.e., the jurisdictional High Court has itself considered this issue and have consistently taken the stand that flavored milk also is nothing but milk and would squarely fall under Entry 16 of the Schedule I of the Andhra Pradesh VAT Act. We see no reason why not to endorse the same view or any strong material to have been produced by the respondents to reach to the conclusion that the contentions advanced by the learned counsel for the petitioners are not acceptable.

7. In view of the same, the writ petition stands allowed and the impugned proceedings so far as the assessment order, dated 19.12.2005 is hereby set aside/quashed. There shall be no order as to costs.

Miscellaneous applications pending, if any, shall stand closed.

_________________ P.SAM KOSHY, J _________________________________ SUDDALA CHALAPATHI RAO, J

23.09.2025 AQS