M/Skanaka Durga Traders vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petitions, following its previous order in W.P.No.45971 of 2018. The assessment orders passed by the 1st respondent, which levied GST on the value of broken rice, bran, and husk by treating them as part of the consideration for custom milling of paddy, were set aside. The Court clarified that the petitioners would still be liable to pay tax on the sale of these by-products if they were statutorily taxable. The ratio decidendi is that by-products of custom milling, in the absence of specific contractual stipulation to the contrary or statutory provision, are not to be automatically considered as part of the consideration for the primary service of milling, and thus not subject to GST as such. The operative direction was to set aside the impugned assessment orders. No issue was expressly left undecided.
Facts
The petitioners filed a batch of writ petitions challenging assessment orders passed by the 1st respondent (authority not specified but implied to be a GST authority). These 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 the 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 learned Government Pleader for Commercial Tax, representing the respondents, did not dispute this contention.
Key Issues
1. Whether the by-products of custom milling, namely broken rice, bran, and husk, can be treated as part of the consideration paid for custom milling of paddy for the purpose of levying GST? (Question of law turning on the interpretation of GST provisions related to consideration and supply). Petitioner's contention: The subject matter is squarely covered by the High Court's order in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the assessment orders levying GST on the by-products should be set aside. The petitioners relied on the precedent set by the aforementioned writ petition. Revenue's contention: The learned Government Pleader for Commercial Tax did not dispute the petitioners' contention that the matter was covered by the previous High Court order.
Sections Cited
CGST Act
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.943, 945, 959, 1001 AND 1003 of 2021
COMMON ORDER: (per UDPR,J)
These batch of writ petitions are filed challenging 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 G.Narendra Chetty, learned Government Pleader for Commercial Tax, representing on behalf of respondents 1 and 2, Sri P.Hema Chandra, learned standing counsel, representing on behalf of 3rd respondent and learned Assistant Solicitor, representing on behalf of the 4th 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.
Following the above said order and for the reaso
The judgment continues below.
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