M/S. Sri Rama Krishna Rice Mill vs. The Assistant Commissioner

Held

The Court allowed the writ petitions. It held that 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's decision was based on the precedent established in W.P.No.45971 of 2018, dated 20.11.2020, which the revenue did not contest as being applicable. The ratio decidendi is that by-products of custom milling, unless statutorily taxable on their own sale, do not automatically form part of the consideration for the milling service itself. The Court clarified that the petitioners remain liable to pay tax on the sale of these by-products if they are statutorily taxable. No specific provisions were discussed in detail, but the decision implicitly relates to the determination of 'supply' and 'consideration' under GST law.

Facts

These writ petitions were filed by multiple petitioners challenging assessment orders passed by the 1st respondent (authority not explicitly named but implied to be a GST authority). The assessment 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 submission. The petitions were heard together.

Key Issues

1. Whether the by-products, namely broken rice, bran, and husk, obtained from custom milling of paddy, constitute part of the consideration for custom milling services, thereby attracting GST, as determined by the assessment orders? Petitioner's contention: The petitioners argued that the subject matter of 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 therefore, the same relief should be granted. They relied on the precedent set by this prior judgment. Revenue's contention: The learned Government Pleader for Commercial Tax, representing the respondents, did not dispute the petitioners' submission that the matter was covered by the aforementioned High Court order. No specific arguments or reliance on provisions were recorded for the revenue.