M/S. Sri Balaji Rice Mill vs. The Deputy Commissioner (St) (Int)
Held
The Court allowed the writ petition, following its previous order in W.P.No.45971 of 2018. The assessment order passed by the 2nd respondent, which levied GST on the value of by-products (broken rice, bran, and husk) by treating them as part of the consideration for custom milling of paddy, was set aside. 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 generated from custom milling, unless otherwise statutorily taxable on their own sale, should not be treated as part of the consideration for the milling service itself for the purpose of levying GST on the service. The operative direction was to set aside the impugned assessment order.
Facts
The petitioner filed a writ petition challenging an assessment order passed by the 2nd respondent (authority not specified but implied to be a GST authority). The assessment order levied Goods and Services Tax (GST) on the value of broken rice, bran, and husk, which 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, representing the respondents, did not dispute this fact. The Court heard arguments from the petitioner and the respondents.
Key Issues
1. Whether the assessment order passed by the 2nd respondent, levying GST on the value of broken rice, bran, and husk obtained from custom milling of paddy, is valid. This issue turns on the interpretation of relevant GST provisions concerning the valuation of services and by-products in custom milling. The petitioner contended that the subject matter is squarely 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. The respondents, represented by the Government Pleader for Commercial Tax, 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.8748 of 2019
ORDER: (per UDPR,J)
This writ petition is filed challenging the assessment order passed by the 2nd 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 Sai Gangadhar Chamarty, learned Government Pleader for Commercial Tax representing on behalf of respondents 1 to 3, Sri P.Hema Chandra, learned standing counsel representing on behalf of 4th respondent and learned Assistant Solicitor General, representing on behalf of 5th 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
The judgment continues below.
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