Sri Maruthi Sai Lakshmi Traders vs. The Asst Commissioner (St)
Held
The Court allowed the writ petition, holding that the issue was squarely covered by a previous order of a Division Bench of the same High Court dated 20.11.2020 in W.P.No.45971 of 2018. In that prior case, the assessment order impugned therein was set aside insofar as it related to the levy of GST on the value of by-products (broken rice, bran, and husk) treated as part of the consideration paid for milling of paddy. Therefore, following the precedent, the present writ petition was allowed in terms of that earlier order. The operative direction was to set aside the impugned assessment order to the extent it levied GST on the by-products.
Facts
The petitioner filed a writ petition challenging an Assessment Order passed by the 1st respondent (authority) for the tax period July 2017 to November 2018. The challenge was specifically to the levy of GST on the value of broken rice, bran, and husk, which were by-products obtained during the milling of paddy. These by-products were retained by the petitioner as compensation for a shortfall in the yield of rice supplied to the 3rd respondent, in addition to milling charges. The petitioner sought to set aside the assessment order and direct the 3rd respondent to pay the GST liability.
Key Issues
1. Whether the levy of GST on the value of broken rice, bran, and husk, retained by the petitioner as compensation for a shortfall in paddy milling yield, is contrary to law, facts, and jurisdiction? This issue turns on the interpretation of the consideration received for milling services under the SGST Act, 2017. Contentions: Petitioner: Argued that the assessment order was illegal and without jurisdiction, as the by-products retained should not be considered part of the consideration for milling services, and therefore, GST should not be levied on their value. The petitioner sought a mandamus to set aside the order and direct the 3rd respondent to pay the GST liability. Revenue/State: The judgment does not record any specific arguments made by the revenue or state.
Sections Cited
SGST Act, 2017
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HON’BLE SRI JUSTICE C. PRAVEEN KUMAR & HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P. No. 25034 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.A2- 11/CMR/2019, dated 29.10.2020 for the tax period July, 2017 to November, 2018 under the SGST Act, 2017, 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
The judgment continues below.
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