M/S Sri Sai Teja Agro Industries Private Limited vs. Assistant Commissioner Of State Tax
Held
The Court allowed the writ petition, setting aside the appellate order of the 3rd respondent and the assessment orders of the 1st respondent. The Court reasoned that the issue was covered by its previous order in W.P.No.45971 of 2018. The principle established is that by-products like broken rice, bran, and husk obtained from custom milling of paddy should not be treated as part of the consideration for custom milling services for the purpose of levying GST, unless they are statutorily taxable in their own right upon sale. The operative direction was to set aside the impugned orders. The Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are statutorily taxable.
Facts
The petitioner filed a writ petition challenging an appellate order passed by the 3rd respondent, which confirmed an assessment order by the 1st respondent. The assessment order levied Goods and Services Tax (GST) on the value of broken rice, bran, and husk generated from the custom milling of paddy by the petitioner. The petitioner argued that the issue was covered by a previous order of the High Court in W.P.No.45971 of 2018. The Government Pleader for Commercial Tax did not dispute this contention. The 5th respondent was represented by the Assistant Solicitor General, and the 6th respondent by their standing counsel.
Key Issues
1. Whether the broken rice, bran, and husk obtained from custom milling of paddy should be treated as part of the consideration for custom milling services, thereby attracting GST? Petitioner's contention: The petitioner argued that the subject matter of the writ petition is squarely covered by the High Court's order in W.P.No.45971 of 2018, dated 20.11.2020, and requested a similar order. Revenue's contention: The learned Government Pleader for Commercial Tax representing the respondents did not dispute the petitioner's submission that the matter was covered by the aforementioned 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.1617 of 2021
ORDER: (per UDPR,J)
This writ petition is filed challenging the appellate order passed by the 3rd respondent in confirming 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 K.V.J.L.N.Sastry, learned Government Pleader for Commercial Tax representing on behalf of respondents 1 to 4, learned Assistant Solicitor General, representing on behalf of 5th respondent and Sri P.Hema Chandra, learned standing counsel representing on behalf of 6th 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 judgment continues below.
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