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,  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.
4. The assessee would be a dealer if it is found to be carrying on the business of selling goods in Uttar Pradesh but the question is whether it carries on the business in Uttar Pradesh or not. It can carry on the business in Uttar Pradesh even though its headquarters are in Calcutta and it has no office or branch in Uttar Pradesh. Business means an activity of a certain kind and so long as it does any part of the activity in Uttar Pradesh it may be said to be carrying on the business in Uttar Pradesh. It is only if it does no part of the activity which constitutes business in Uttar Pradesh that it can be said that it is not carrying on any business in Uttar Pradesh. According to the statement of the case it sends goods to itself in Uttar Pradesh and they are taken delivery of either by its own agents or by the bankers to whom the railway receipts are endorsed or to its customers in whose favour the bankers endorse the railway receipts. But the bankers, even if they are nominated by the customers, act as the assessee's agents. The assessee endorses the railway receipts in favour of the bankers and they are directed to hand over them after the required endorsement to the customers on realising the price from them. In realising the price from the customers and in re-endorsing the receipts in their favour they act as the assessee's agents. When the assessee sends the railway receipts endorsed in their favour it means that it despatches the goods to its agents and when they endorse them in favour of the customers and the customers take delivery of them it means that its agents in Uttar Pradesh deliver them to the customers. Thus some of the activity which constitutes the business is done by the assessee in Uttar Pradesh and it can be said to carry on the business in Uttar Pradesh. The case is not one in which it does nothing in Uttar Pradesh which can go to constitute business. We may refer to J.L. Morison v. Sales Tax Officer  6 S.T.C. 647. in which Chowdhry, J., observed that 'physical presence of the person concerned or his agent within the State of Uttar Pradesh for the purpose of carrying on the business of sale is necessary before it can be said to be carrying on that business within the definition of a 'dealer.' ' We have found physical presence of the assessee's agents in Uttar Pradesh for the purpose of doing some act in the carrying on of the business of selling goods, namely of the agents who take delivery of the goods and sell them by going from door to door or the bankers. Chowdhry, J., did not lay down that the assessee must reside in Uttar Pradesh or even that he must be physically present in Uttar Pradesh ; it is enough if his agent is present in Uttar Pradesh. Residence is not at all an ingredient of the carrying on of business and Chowdhry, J., did not lay down that it is.
5. In Vakkan v. State of Madras  6 S.T.C. 647 an assessee residing outside Madras State was held to be carrying on business in Madras State because he entered into contracts in Madras State with his customers living in Madras State and he delivered goods to them in Madras State. He was found to go to Madras State in order to execute the contracts and deliver the goods ; on account of these activities done by him in Madras State he was held to be carrying on the business in Madras State. Even if the place where the property in the goods passed from the assessee to its customers had any relevancy, we do not find necessary facts in the statement of the case to enable us to decide where the property in the goods passed. In the absence of the necessary facts we cannot assume that the property in the goods passed in Calcutta and consequently even if the assessee could not be said to be carrying on the business in Uttar Pradesh if the property in the goods always passed outside Uttar Pradesh, it is not possible for us to say that in this case the assessee did not carry on the business in Uttar Pradesh. Our answer to question No. 2 is, therefore, in the affirmative.
6. Question No. 3.-This question does not arise. The assessee has been found to be a dealer and the goods that he sold have been found to be not exempt from sales tax. It is, therefore, liable to sales tax and the question where the sale took place, that is, where the property in the goods passed is irrelevant. Further, as we said earlier, we have not got the necessary facts to justify our saying that the sale did not take place within Uttar Pradesh. If the question were to be answered it can only be answered as follows :-
The sale cannot be said not to have taken place within the State of Uttar Pradesh.
7. We direct that copies of this judgment shall be sent under the signature of the Registrar and the seal of the Court to the Judge (Revisions) and the Commissioner, Sales Tax, U.P., as required by Section 11(6) of the U.P. Sales Tax Act.
8. We further direct that the Commissioner, Sales Tax, U. P., will get his costs of this reference, which we assess at Rs. 50. Counsel's fee is assessed at Rs. 50.