M/S. Dumpa Krishna Rao vs. Assistant Commissioner Of State Tax
Held
The High Court allowed the writ petitions, setting aside the impugned orders. The Court held that the levy of GST on the value of by-products, namely broken rice, bran, and husk, treating them as part of the consideration paid for the milling of paddy, was not sustainable. The Court followed its previous order dated 20-11-2020, passed in W.P.No.45971 of 2018, and applied the reasoning from that order. The ratio decidendi is that by-products generated during a service, which are not explicitly part of the agreed consideration for the primary service, cannot be unilaterally included in the taxable value of that service. The operative direction was to set aside the impugned orders to the extent they related to the levy of GST on the by-products. No costs were awarded. No issues were expressly left undecided.
Facts
The petitioners filed multiple writ petitions challenging orders that levied Goods and Services Tax (GST) on the value of by-products, specifically broken rice, bran, and husk. These by-products were generated during the milling of paddy. The revenue authorities treated these by-products as part of the consideration received by the petitioners for their milling services. The petitioners contested this classification and levy. The present common order addresses these writ petitions, which were filed in 2021.
Key Issues
1. Whether the levy of GST on the value of by-products (broken rice, bran, and husk) generated from milling paddy, treating them as part of the consideration for milling services, is legally sustainable? Petitioner's contention: The petitioners argued that the by-products are not part of the consideration for milling services. They relied on the principle that only consideration for a supply is taxable. Revenue's contention: The revenue contended that the by-products, by their nature, form part of the overall transaction and thus their value should be included in the taxable consideration for the milling service. The revenue's specific arguments or reliance on any particular provisions, circulars, or precedents are not explicitly recorded in the judgment.
Sections Cited
None explicitly mentioned
AI-generated summary — verify with the full judgment below
HON’BLE SRI JUSTICE A.V.SESHA SAI & HON’BLE MS JUSTICE J.UMA DEVI
W.P.NOS.40, 42, 56, 57, 70, 73, 81, 85, 110, 117 AND 133 OF 2021
COMMON ORDER: (Per AVSS,J)
When these matters are taken up, it is submitted by both the learned counsel for the petitioners and the learned Government Pleader for Commercial Tax that the issue in the present writ petitions is covered by the order, dated 20-11-2020, passed by this Court in W.P.No.45971 of 2018. A copy of the said order is placed on record.
Following the above said order and for the reasons recorded therein, these writ petitions are allowed, at the stage of admission, setting aside the orders impugned insofar as the same relate to the levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of consideration paid to the petitioners for milling of the paddy. No costs.
Miscellaneous Petitions pending in the above writ petitions, if any, shall stand closed in consequence.
_______________ A.V.SESHA SAI,J
________________ J. UMA DEVI,J
5th JANUARY,2021 TSNR
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