M/S Sri Satyanarayana Modern Rice Mill vs. The Assistant Commissioner(State Taxes)-Ii
Held
The High Court allowed the writ petition, setting aside the assessment order passed by the 1st respondent. The Court followed its previous order in W.P.No.45971 of 2018, holding that the by-products, namely broken rice, bran, and husk, obtained from custom milling of paddy should not be treated as part of the consideration paid for the custom milling service. The reasoning was based on the principle established in the cited precedent. However, the Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are independently subject to statutory taxation. The operative direction was to set aside the impugned assessment order.
Facts
The petitioner challenged 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, representing the respondents, did not dispute this contention. The assessment order treated the by-products as part of the consideration paid for custom milling.
Key Issues
1. Whether the by-products of broken rice, bran, and husk obtained from custom milling of paddy are to be treated as part of the consideration for custom milling services, thereby attracting GST, or if they are separate taxable supplies. This issue turns on the interpretation of the relevant provisions of the GST Act concerning the scope of supply and consideration. The petitioner contended that the issue is squarely covered by the High Court's order in W.P.No.45971 of 2018, implying that the by-products should not be treated as part of the consideration for custom milling. The revenue (represented by the Government Pleader for Commercial Tax) did not dispute the petitioner's submission 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.2107 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 1 and 4, Sri P.Hema Chandra, learned standing counsel representing on behalf of respondents 2 and 3 and learned Assistant Solicitor 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 als
The judgment continues below.
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