M/S. Bnm Rice Mill vs. Assistant Commissioner Of State Tax

Held

The Court allowed the writ petition, quashing the impugned order dated August 20, 2020, and the order dated January 5, 2019. The Court found that the issue was squarely covered by a previous order of a Division Bench of the same High Court dated November 20, 2020, in W.P.No.45971 of 2018. In that prior case, the assessment order was set aside insofar as it related to the levy of GST on the value of by-products like broken rice, bran, and husk, treating them as part of the consideration paid for milling paddy. The reasoning was that these by-products, when retained by the miller, should not be treated as part of the consideration for the milling service. The Court directed that the present writ petition be allowed in terms of the aforementioned Division Bench order. The issue regarding the direction to the fifth respondent to pay GST on custom milled rice charges was not explicitly addressed in the provided text, but the overall allowance of the petition implies relief for the petitioner.

Facts

The petitioner filed a writ petition challenging an order dated August 20, 2020, passed by the second respondent, which confirmed an order dated January 5, 2019, passed by the first respondent. These orders pertained to the tax period from July 2017 to June 2018 under the CGST/Andhra Pradesh SGST Act. The dispute involved the petitioner's liability to pay GST on the value of broken bran and husk retained as by-products during the milling of paddy for the fifth respondent. The petitioner also sought a direction for the fifth respondent to pay GST at 5% on custom milled rice charges of Rs. 15 per quintal.

Key Issues

1. Whether the petitioner is liable to pay GST on the value of broken bran and husk retained as by-products in the course of milling paddy for the fifth respondent, under the CGST/Andhra Pradesh SGST Act. Petitioner's contention: The petitioner argued that they are not liable to pay tax on the value of broken bran and husk, which are by-products of paddy milling. Revenue's contention: The revenue contended that the value of these by-products should be considered as part of the consideration received for the milling services and thus subject to GST. The revenue relied on the assessment orders passed by the authorities. 2. Whether the fifth respondent should be directed to pay GST at 5% on the value of custom milled rice charges of Rs. 15 per quintal. Petitioner's contention: The petitioner sought a direction for the fifth respondent to pay GST at the specified rate on the custom milled rice charges.