Sai Durga Rice Industries vs. The Assistant Commissioner (S.T)
Held
The Court allowed the writ petition, setting aside the assessment order passed by the 1st respondent. The assessment order had levied GST on the value of by-products (broken rice, bran, and husk) by treating them as part of the consideration paid to the petitioner for custom milling of paddy. The Court followed its previous order in W.P.No.45971 of 2018 and the reasons recorded therein. The Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are statutorily taxable. The ratio decidendi is that by-products of custom milling, unless otherwise statutorily taxable, cannot be treated as part of the consideration for the milling service for the purpose of levying GST.
Facts
The petitioner filed a writ petition challenging an assessment order passed by the 1st respondent, which levied GST on the value of broken rice, bran, and husk. These by-products were obtained by the petitioner from the custom milling of paddy. The petitioner 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 submission. The Court heard arguments from the counsel for the petitioner and the government pleader.
Key Issues
1. Whether the GST assessment order levying tax on the value of broken rice, bran, and husk obtained from custom milling of paddy is valid, considering the precedent set by this Court in W.P.No.45971 of 2018? Petitioner's contention: The subject matter of the writ petition is squarely covered by the order passed by this Court in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the same order should be applied. The petitioner relied on the previous High Court order. Revenue's contention: The learned Government Pleader for Commercial Tax representing the respondents did not dispute the petitioner's submission that the matter was covered by 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 No.3546 of 2021
ORDER: (per UDPR,J)
This writ petition is filed challenging the assessment order passed by the 1st respondent levying GST on the value of broken rice, bran and husk obtained by the petitioner on custom milling of the paddy.
Heard learned counsel for petitioner, Sri A.Bhaskara Chary, 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, representing on behalf of the 4th respondent.
When the matter is taken up for hearing, learned counsel for petitioner would submit that the subject matter in this writ petition 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 this writ petition 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 therein, this writ petition is also allow
The judgment continues below.
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