Both sentences indicate generality but is there any difference between them? Or when there is preference to one than the other?
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"Cats drink milk" is a general statement about what cats do.
"Cat drinks milk" doesn't really make sense, unless your cat is named "Cat" (not unheard of :-), or if you're talking about someone or something else named "Cat".
"A cat drinks milk" could also be a general statement about what cats do -- "What does a cat do? It drinks milk."
On the other hand, "The cat drinks milk" is a specific statement about a particular cat.