Gruha Jyothi Agro Food Products vs. Assistant Commissioner Of State Tax
Held
The Court allowed the writ petitions. It held that the appellate orders passed by the 2nd respondent, which confirmed the assessment orders of the 1st respondent levying 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, were to be set aside. The reasoning was based on the precedent established in W.P.No.45971 of 2018. The ratio decidendi is that by-products of custom milling, if not statutorily taxable as part of the consideration, cannot be subjected to GST under the circumstances described. However, the Court clarified that the petitioners remain liable to pay tax on the sale of these by-products if they are otherwise statutorily taxable. The operative direction was to set aside the impugned appellate and assessment orders.
Facts
The petitioners filed two writ petitions challenging appellate orders passed by the 2nd respondent. These appellate orders confirmed assessment orders passed by the 1st respondent, which 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 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 fact. The High Court considered the previous order and the arguments presented.
Key Issues
1. Whether the appellate orders confirming the assessment orders levying GST on the value of broken rice, bran, and husk, obtained by the petitioners on custom milling of paddy, are valid? Petitioner's contention: The petitioners argued that the subject matter of these writ petitions is squarely covered by the order of this Court in W.P.No.45971 of 2018, dated 20.11.2020, and therefore, the same order should be applied. 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 fact that the present petitions were covered by the aforementioned order of this Court. No specific arguments or reliance on provisions were recorded for the revenue.
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HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
WRIT PETITION Nos.219 and 223 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 4 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.
Following the above said order and for the reasons recorded therein, these writ peti
The judgment continues below.
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