M/S. Pallavi Enterprises vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, following its previous order in W.P.No.45971 of 2018. The assessment order 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, was set aside. The Court clarified that the petitioner would still be liable to pay tax on the sale of these by-products if they are statutorily taxable. The reasoning was based on the precedent established in the earlier writ petition. The ratio decidendi is that by-products of custom milling, in themselves, may not constitute consideration for the milling service unless they are part of the agreed consideration. The operative direction was to set aside the assessment order.
Facts
The petitioner challenged an assessment order passed by the 1st respondent (authority not specified) levying 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 contended 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 did not dispute this contention. The assessment order treated the by-products as part of the consideration for custom milling.
Key Issues
1. Whether the by-products of custom milling, namely broken rice, bran, and husk, constitute part of the consideration for the custom milling service, thereby attracting GST, as per the impugned assessment order? Petitioner's contention: The petitioner argued that the subject matter is squarely covered by this Court's previous order in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the assessment order should be set aside. Revenue's contention: The learned Government Pleader for Commercial Tax did not dispute the petitioner's submission regarding the applicability of the previous High Court order.
Sections Cited
CGST Act, SGST 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 No.10731 of 2019
COMMON 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 K.Raji Reddy, 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 4th 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 also allowed
The judgment continues below.
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