M/S. Krishnaveni Rice Industry vs. The Assistant Commissioner
Held
The Court allowed the writ petitions, setting aside the assessment orders passed by the 1st respondent. The Court held that the levy of GST on the value of broken rice, bran, and husk, treating them as part of the consideration for custom milling of paddy, was incorrect, following its prior decision in W.P.No.45971 of 2018. The reasoning was that the issue was squarely covered by the precedent. The ratio decidendi is that by-products of custom milling, if not part of the statutory consideration for the primary service, cannot be taxed as such under GST without proper justification or statutory basis, especially when a High Court has already ruled on similar facts. The operative direction was to set aside the assessment orders. However, the Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are statutorily taxable. No issue was expressly left undecided.
Facts
The petitioners filed writ petitions challenging assessment orders passed by the 1st respondent, which levied Goods and Services Tax (GST) on the value of broken rice, bran, and husk. These by-products were obtained by the petitioners during the custom milling of paddy. The petitioners argued that the issue was covered by a previous order of the High Court in W.P.No.45971 of 2018, dated 20.11.2020. The learned Government Pleader for Commercial Tax, representing the respondents, did not dispute this contention. The petitions were heard by the High Court.
Key Issues
1. Whether the assessment orders levying GST on the value of broken rice, bran, and husk obtained from custom milling of paddy are valid, considering the precedent set by this Court in W.P.No.45971 of 2018. Petitioner's Contention: The subject matter of these writ petitions is squarely covered by the order of this Court in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the same order should be passed in these petitions. Revenue's Contention: The learned Government Pleader for Commercial Tax representing the respondents did not dispute the petitioner's contention that the matter is covered by the previous High Court order.
AI-generated summary — verify with the full judgment below
HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.4839 AND 4849 of 2021
COMMON ORDER: (per UDPR,J)
These writ petitions are filed challenging the assessment orders passed by the 1st respondent levying GST on the value of broken rice, bran and husk obtained by the petitioners on custom milling of the paddy.
Heard learned counsel for petitioners, Sri K. Srinivasa Rao, learned Government Pleader for Commercial Tax, representing on behalf of respondents 1 and 4, Sri P.Hema Chandra, learned standing counsel, representing on behalf of 2nd and 3rd respondents and learned Assistant Solicitor General of India, representing on behalf of the 5th respondent.
When the matters are taken up for hearing, learned counsel for petitioners would submit that the subject matter in the writ petitions are squarely covered by the order passed by this Court in W.P.No.45971 of 2018, dated 20.11.2020 and the same order may be passed in these writ petitions also. Learned Government Pleader for Commercial Tax representing on behalf of respondents has not disputed the said fact.
Following the above said order and for the r
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.