M/S. Sri Vasavi Kanyaka Parameswari Rice And Flour Mill vs. The Assistant Commissioner

Held

The Court allowed the writ petition, setting aside the impugned assessment order. The decision was based on 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, the assessment order was set aside specifically concerning the levy of GST on the value of by-products (broken rice, bran, and husk) when they were treated as part of the consideration paid for milling paddy. The present writ petition was allowed in terms of that precedent. No costs were awarded. The Court directed the registry to annex a copy of the previous order to the current judgment.

Facts

The petitioner filed a writ petition challenging an order dated May 29, 2020, passed by the 2nd respondent, which affirmed an order dated January 10, 2019, passed by the 1st respondent. These orders pertained to the period of July 2017 to June 2018 and involved the levy of GST on by-products retained by a third respondent-corporation. The petitioner sought to set aside these orders, declare them illegal and without jurisdiction, and assert that they are not liable for GST on the by-products. Alternatively, they requested the corporation to bear the liability if it was found payable. The court was informed that the issue was covered by a previous Division Bench order.

Key Issues

1. Whether the levy of GST on the by-products (broken rice, bran, and husk) retained by the third respondent-corporation, treating them as part of the consideration for milling paddy, is illegal and contrary to law, violating principles of natural justice and statutory authority, as contended by the petitioner? Petitioner's Contention: The petitioner argued that the orders were illegal, arbitrary, contrary to law, and passed in gross violation of principles of natural justice and without authority of law and jurisdiction. They sought to set aside the orders and declare themselves not liable for GST on the by-products, or alternatively, direct the corporation to bear the liability. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or the respondents.