M/S Sri Sita Ramanajaneya Rice And Flour Mill 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, levying GST on the value of broken rice, bran, and husk by treating them as part of the consideration for custom milling, 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 ratio decidendi is that by-products of custom milling, such as broken rice, bran, and husk, should not be treated as part of the consideration for the milling service itself, unless they are otherwise statutorily taxable upon sale. The operative direction was to set aside the impugned assessment orders.
Facts
The petitioners filed writ petitions challenging assessment orders passed by the 1st respondent, which levied GST on the value of broken rice, bran, and husk. These by-products were obtained by the petitioners from 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 fact. The assessment orders treated these by-products as part of the consideration paid for custom milling.
Key Issues
1. Whether the GST levied 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 Argument: The petitioners contended that the subject matter of 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 therefore, the same order should be applied. They relied on the aforementioned High Court order. Revenue's Argument: The learned Government Pleader for Commercial Tax, representing the respondents, did not dispute the petitioners' submission that the matter was covered by the previous High Court order. No specific arguments or reliance on provisions/circulars were recorded for the revenue.
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HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.3391, 3396 AND 3400 of 2021
COMMON ORDER: (per UDPR,J)
These batch of 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, 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 record
The judgment continues below.
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