M/S. Dayanidhi Rice Mill vs. The Assistant Commissioner (St)

Held

The Court allowed the writ petitions, following its previous order in W.P.No.45971 of 2018. The assessment orders passed by the 1st respondent, which 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, were set aside. The reasoning was based on the precedent established in the earlier writ petition, which the revenue did not dispute. The ratio decidendi is that by-products of custom milling, such as broken rice, bran, and husk, should not be treated as part of the consideration for the milling service for GST purposes, unless they are statutorily taxable upon sale. The Court clarified that the petitioners remain liable to pay tax on the sale of these by-products if they are otherwise statutorily taxable. No specific issue was left undecided.

Facts

These writ petitions were filed by multiple petitioners challenging assessment orders passed by the 1st respondent (authority not specified but implied to be a GST authority) levying 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 fact. The amount in dispute is not explicitly stated. The procedural history involves the filing of these writ petitions challenging the assessment orders.

Key Issues

1. Whether the GST levied on the value of broken rice, bran, and husk, obtained from custom milling of paddy, is sustainable in light of the High Court's previous order in W.P.No.45971 of 2018? (Question of law) Petitioner's contention: The petitioners contended 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 order should be applied here. They relied on the precedent set by the aforementioned writ petition. 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 previous High Court order. No specific arguments or reliance on provisions/circulars were recorded for the revenue.