M/S. Sri Venkateswara Industries vs. The Assistant Commissioner (State Taxes)
Held
The Court allowed the writ petition, setting aside the assessment order passed by the 1st respondent. The Court reasoned that the issue was squarely covered by its previous order in W.P.No.45971 of 2018. 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 for custom milling. The Court clarified that the petitioner would still be 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, in the context of the cited precedent, cannot be considered as part of the consideration for the milling service itself for the purpose of levying GST on the milling service, unless they are otherwise taxable upon their sale.
Facts
The petitioner filed a writ petition challenging an assessment order passed by the 1st respondent (authority not specified) levying Goods and Services Tax (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 Government Pleader for Commercial Tax did not dispute this contention. The assessment order was passed by the 1st respondent.
Key Issues
1. Whether the by-products of custom milling, namely broken rice, bran, and husk, obtained by the petitioner, are to be treated as part of the consideration for custom milling services, thereby attracting GST? (This is a mixed question of law and fact, turning on the interpretation of relevant GST provisions concerning the valuation of supply and the nature of by-products in custom milling). Contentions: Petitioner: The subject matter is covered by this Court's order in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the assessment order should be set aside. Revenue/State: Did not dispute the petitioner's contention 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 No.2721 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 Srinivasa Rao Kudupudi, learned Government Pleader for Commercial Tax representing on behalf of respondents.
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 allowed and the assessment order passed by the 1st respondent levying GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the conside
The judgment continues below.
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