M/S. Sri Ramamurthy Modern Rice Mill vs. Assistant Commissioner Of State Tax
Held
The Court allowed the writ petitions, setting aside the appellate orders 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 levy of GST on the value of by-products (broken rice, bran, and husk) treating them as part of the consideration for custom milling of paddy was thus quashed. The ratio decidendi is that by-products of custom milling are not to be automatically considered as part of the consideration for the milling service if a prior High Court judgment has ruled otherwise on similar facts. The Court clarified that the petitioners remain liable to pay tax on the sale of these by-products if they are statutorily taxable. The operative direction was to set aside the impugned orders.
Facts
The petitioners filed writ petitions challenging appellate orders passed by the 2nd respondent (appellate authority) which confirmed assessment orders passed by the 1st respondent (assessing authority). The assessment orders levied Goods and Services Tax (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 Government Pleader for Commercial Tax did not dispute this contention.
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 thus exigible to GST, considering the precedent set by this Court in W.P.No.45971 of 2018. Petitioner's contention: The subject matter 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 applied. Revenue's contention: The learned Government Pleader for Commercial Tax did not dispute the petitioner's submission that the matter is covered by the aforementioned order.
Sections Cited
Not specified
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.3150, 3231, 3241 and 3243 of 2021
COMMON ORDER: (per UDPR,J)
These writ petitions are filed challenging the appellate orders passed by the 2nd respondent in confirming 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.V.J.L.N.Sastry, learned Government Pleader for Commercial Tax representing on behalf of respondents 1 to 3, learned Assistant Solicitor General, representing on behalf of 4th respondent and Sri P.Hema Chandra, learned standing counsel representing on behalf of 5th 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.
The judgment continues below.
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