M/S Sri Laxmiganapathi Modern Rice Mill vs. Assistant Commissioner Of State Tax
Held
The Court allowed the writ petitions, setting aside the appellate orders passed by the 2nd respondent and the assessment orders passed by the 1st respondent. The Court reasoned that the issue was covered by its previous order in W.P.No.45971 of 2018. The assessment orders 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 of paddy. The ratio decidendi is that by-products of custom milling, in the absence of specific statutory provisions to the contrary or evidence of them being part of the consideration, should not be taxed as part of the milling service fee. The operative direction was to set aside the impugned orders. However, the Court clarified that the petitioners remain liable to pay tax on the sale of these by-products if they are statutorily taxable. No issue was expressly left undecided.
Facts
The petitioners filed two writ petitions challenging appellate orders passed by the 2nd respondent, which confirmed assessment orders by the 1st respondent. These assessment orders levied Goods and Services Tax (GST) on the value of broken rice, bran, and husk. The petitioners obtained these by-products from the custom milling of paddy. The revenue, represented by the Government Pleader for Commercial Tax, did not dispute the petitioners' contention that the matter was covered by a previous High Court order. The previous order was in W.P.No.45971 of 2018, dated 20.11.2020.
Key Issues
1. Whether the by-products of custom milling, namely broken rice, bran, and husk, are to be treated as part of the consideration for custom milling services, thereby attracting GST on their value, as determined by the 1st and 2nd respondents. Petitioner's contention: The subject matter is squarely covered by this Court's order in W.P.No.45971 of 2018, dated 20.11.2020, and the same order should be applied. Revenue's contention: The learned Government Pleader for Commercial Tax representing the respondents did not dispute the petitioners' 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 Nos.628 and 671 of 2021
COMMON ORDER: (per UDPR,J)
These two writ petitions are filed challenging the appellate orders passed by the 2nd respondent in confirming 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 K.V.J.L.N.Sastry, learned Government Pleader for Commercial Tax representing on behalf of respondents 1 to 3, learned Assistant Solicitor General, representing on behalf of 4th respondent and Sri P.Hema Chandra, learned standing counsel representing on behalf of 5th 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.
Follo
The judgment continues below.
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