M/S. Venkata Maruthi Sai Lakshmi Traders vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petitions, following its previous order in W.P.No.45971 of 2018. The assessment orders passed by the 1st respondent, which levied GST on the value of broken rice, bran, and husk by treating them as part of the consideration paid for custom milling of paddy, were set aside. The Court clarified that the petitioners would still be liable to pay tax on the sale of these by-products if they were statutorily taxable. The reasoning is based on the precedent established by the earlier High Court judgment. The ratio decidendi is that by-products of custom milling, in the absence of specific statutory provisions to the contrary or a dispute regarding their taxable status as separate sales, should not be automatically included as part of the consideration for the primary service of custom milling for GST purposes, especially when a binding precedent exists.
Facts
The petitioners filed writ petitions challenging assessment orders passed by the 1st respondent (authority not specified but implied to be a GST authority). These orders levied GST on the value of broken rice, bran, and husk, which were obtained by the petitioners from the custom milling of paddy. The petitioners contended 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 Government Pleader for Commercial Tax, representing the respondents, did not dispute this contention. The dispute concerns the taxability of these by-products as part of the consideration for custom milling.
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 and are thus exigible to GST, as held by the 1st respondent. Petitioner's contention: The issue is squarely covered by the High Court's order in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the assessment orders levying GST on these by-products should be set aside. Revenue's contention: The Government Pleader for Commercial Tax did not dispute the petitioner's submission regarding the applicability of the previous High Court order.
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HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.4307 and 4369 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 G.Narendra Chetty, learned Government Pleader for Commercial Tax, representing on behalf of respondents 1 and 2, Sri P.Hema Chandra, learned standing counsel, representing on behalf of 3rd respondent and learned Assistant Solicitor General, representing on behalf of the 4th respondent.
When the matter is taken up for hearing, learned counsel for petitioners would submit that the subject matter in these writ petitions is 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 reasons recorded t
The judgment continues below.
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