M/S. Jai Balaji Modem Rice Mill vs. Assistant Commissioner Of State Tax

Held

The Court allowed the writ petition, setting aside the appellate order passed by the 2nd respondent and the assessment orders passed by the 1st respondent. The Court reasoned that the issue was covered by its previous order in W.P.No.45971 of 2018. The ratio decidendi is that by-products obtained from custom milling of paddy, such as broken rice, bran, and husk, should not be treated as part of the consideration for custom milling services for the purpose of levying GST, unless they are statutorily taxable on their own sale. The operative direction was to set aside the impugned orders. The Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are statutorily taxable. No specific issue was left undecided.

Facts

The petitioner filed a writ petition challenging an appellate order that confirmed an assessment order. The assessment order levied Goods and Services Tax (GST) on the value of broken rice, bran, and husk, which were obtained by the petitioner from the custom milling of paddy. The petitioner contended that the issue was covered by a previous order of the High Court in W.P.No.45971 of 2018. The Government Pleader for Commercial Tax did not dispute this contention. The writ petition was filed against the Deputy Commissioner (ST) (1st respondent) and the Additional Commissioner (ST) (Appeals) (2nd respondent). The tax period is not specified.

Key Issues

1. Whether the by-products of custom milling, namely broken rice, bran, and husk, are to be treated as part of the consideration for custom milling services, thereby attracting GST on their value, as held by the assessing and appellate authorities? Petitioner's contention: The petitioner argued that the subject matter of the writ petition is squarely covered by the order of this Court in W.P.No.45971 of 2018, and therefore, the same relief granted in that case should be extended to the present petition. The petitioner relied on the precedent set by the High Court in the aforementioned writ petition. Revenue's contention: The learned Government Pleader for Commercial Tax did not dispute the petitioner's submission that the matter is covered by the previous High Court order. Therefore, no specific arguments were advanced by the revenue against the petitioner's claim.