Sri Satya Sai Durga Traders vs. The Assistant Commissioner (St)
Held
The High Court allowed the writ petition, setting aside the impugned assessment order dated 31.10.2020 passed by the Assistant Commissioner (ST) insofar as it related to the levy of GST on the value of by-products (broken rice, bran, and husk). The Court reasoned that this issue was covered by previous orders of the High Court, specifically mentioning an order dated 20.11.2020 in W.P.No.45971 of 2018 and a common order dated 17.12.2020 in several other writ petitions. The ratio decidendi is that the levy of GST on by-products retained by a miller as compensation for supplying their own rice to make up for yield shortfalls, in addition to milling charges, is not permissible. The Court directed that the present order would be subject to the ultimate decision of the Supreme Court, as the Government had filed an appeal in similar matters.
Facts
The petitioner, M/s. Sri Satya Sai Durga Traders, represented by its Managing Partner, filed a writ petition challenging an assessment order passed by the Assistant Commissioner (ST), Bhimavaram Circle. The order, dated 31.10.2020, pertains to the tax period July 2017 to November 2018 under the CGST Act, 2017. The petitioner was aggrieved by the levy of GST on the value of broken rice, bran, and husk, which were obtained during the milling of paddy belonging to the third respondent. These by-products were allowed to be retained by the petitioner in addition to milling charges, as compensation for supplying their own rice to make up for shortfalls in yield. The petitioner contended that this levy was contrary to law, without jurisdiction, and illegal.
Key Issues
1. Whether the levy of GST on the value of broken rice, bran, and husk, retained by the petitioner as compensation for milling paddy and making up for shortfalls in yield, is contrary to law, facts, and without jurisdiction, under the CGST Act, 2017? The petitioner argued that the assessment order was illegal and without jurisdiction, as the by-products retained were not part of the consideration for milling services but rather compensation for their own rice supplied to meet yield shortfalls. The petitioner relied on previous High Court orders dealing with similar issues. The respondents, represented by the Government Pleader, Commercial Tax, and Assistant Solicitor General, did not present any specific arguments against the petitioner's claim in the judgment. However, it was noted that the Government had moved the Supreme Court in similar matters, and notices had been issued.
Sections Cited
CGST Act 2017
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT Dt: 26.10.2021
(Per Hon’ble Sri Justice Ahsanuddin Amanullah)
Heard Mr. G.Narendra Chetty, learned counsel for the petitioner, Mr. Sekhar, learned Government Pleader, Commercial Tax, for the respondents no.1 and 2, Mr. P.Hema Chandra, learned Standing Counsel, Civil Supplies, for the respondent no.3
2
and Mr. Harinath N., learned Assistant Solicitor General appearing fo
The judgment continues below.
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