M/S. Sri Venkata Sai Kiran Modem Rice Mill vs. The Assistant Commissioner (State Taxes)
Held
The Court allowed the writ petition, setting aside the appellate order passed by the 2nd respondent which confirmed the assessment order by the 1st respondent. The assessment order 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 Court followed its previous order in W.P.No.45971 of 2018 and held that the by-products are not to be treated as part of the consideration for custom milling. However, the Court clarified that the petitioner remains liable to pay tax on the sale of these by-products if they are statutorily taxable. The ratio decidendi is that by-products of custom milling are not automatically part of the consideration for the milling service unless statutorily mandated, and their taxability on sale is a separate consideration.
Facts
The petitioner filed a writ petition challenging an appellate order passed by the 2nd respondent, which confirmed an assessment order by the 1st respondent. The assessment order levied GST on the value of broken rice, bran, and husk obtained by the petitioner from 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 writ petition was filed challenging the appellate order passed by the 2nd respondent confirming the assessment order passed by the 1st respondent.
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 and thus exigible to GST, considering the High Court's previous order in W.P.No.45971 of 2018. Petitioner's contention: The petitioner argued that the subject matter of the writ petition 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. Revenue's contention: The learned Government Pleader for Commercial Tax representing the respondents did not dispute the petitioner's submission that the matter is covered by the aforementioned previous order.
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HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
WRIT PETITION No.386 of 2021
ORDER: (per UDPR,J)
This writ petition is filed challenging the appellate order passed by the 2nd respondent in confirming 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 Srinivasa Rao Kudupudi, learned Government Pleader for Commercial Tax representing on behalf of respondents 1 and 4, Sri P.Hema Chandra, learned standing counsel representing on behalf of respondents 2 and 3 and learned Assistant Solicitor representing on behalf of 5th 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 the present writ petition also. Learned Government Pleader for Commercial Tax representing on behalf of respondents has not disputed the said fact.
Following the above said
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