M/S. Sri Kasturi Rice Industries vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, following a previous order dated November 20, 2020, passed by a Division Bench of the same High Court in W.P.No.45971 of 2018. In that prior case, an identical Assessment Order concerning the levy of GST on by-products (broken rice, bran, and husk) treated as part of the consideration for milling paddy was set aside. The reasoning in the cited order was that the by-products, when retained by the petitioner, should not be treated as part of the consideration paid for milling services. Therefore, the levy of GST on their value was deemed incorrect. The present Court applied this precedent directly, setting aside the impugned Assessment Order in so far as it related to the levy of GST on the value of the by-products.
Facts
The petitioner filed a writ petition challenging an Assessment Order dated October 1, 2020, issued by the 1st respondent (GST authorities). The order pertains to the tax period from July 2017 to November 2018. The dispute concerns the levy of GST on the value of broken rice, bran, and husk, which are by-products obtained during the milling of paddy. The petitioner retained these by-products as compensation for supplying their own rice to the 3rd respondent to make up for yield shortfalls, in addition to milling charges of Rs. 15/- per quintal. The petitioner argued that this levy was contrary to law and without jurisdiction.
Key Issues
1. Whether the levy of GST on the value of broken rice, bran, and husk, retained by the petitioner as compensation for milling paddy, is contrary to law and without jurisdiction? Petitioner's Contention: The petitioner argued that the Assessment Order was illegal, without jurisdiction, and contrary to facts and law. They sought a writ of mandamus to set aside the order and direct the 3rd respondent to pay the GST liability. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or the 3rd respondent. However, the Assessment Order itself, which is under challenge, represents the revenue's position that GST is leviable on the value of the by-products.
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HON’BLE SRI JUSTICE C. PRAVEEN KUMAR & HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P. No. 25302 of 2020
O R D E R:- (Per Hon’ble Sri Justice C.Praveen Kumar)
This writ petition is filed for the following substantive relief: “….to issue a writ of mandamus holding that the impugned Assessment Order passed by the 1st respondent vide Ref.No. SGST/37ACIFS1177L1ZM, dated 01.10.2020 for the tax period July, 2017 to November, 2018 insofar as it relates to the levy of GST on the value of the broken rice, bran and husk obtained in the course of Milling of the paddy of the 3rd respondent, allowed to be retained by the petitioner, in addition to the milling charges of Rs.15/- per quintal as compensation/exchange for the own rice supplied by the petitioner to the 3rd respondent to make up for the short fall in the yield, as contrary to law, facts, without jurisdiction and authority and illegal and consequently set aside the same and further direct the 3rd respondent to pay the GST liability on the petitioner either directly to the 1st respondent or to the petitioner.”
Heard the learned counsel for both the parties and perused
The judgment continues below.
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