M/S. Sri Srinivasa Rice Mill vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, holding that the issue involved 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 paddy. The reasoning in the cited order was that the levy on these by-products was incorrect. Consequently, the present writ petition was allowed in terms of that previous order. The operative direction was to set aside the impugned Assessment Order to the extent it levied GST on the by-products. No costs were awarded. The Court expressly did not decide any new issues, relying entirely on the precedent.
Facts
The petitioner filed a writ petition challenging an Assessment Order passed by the 1st respondent for the tax period July 2017 to November 2018. The challenge was specifically against the levy of GST on the value of broken rice, bran, and husk obtained during the milling of paddy. These by-products were retained by the petitioner as compensation for supplying their own rice to the 3rd respondent to make up for a shortfall in yield, in addition to milling charges of Rs. 15/- per quintal. The petitioner sought to set aside this 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 milling paddy and making up for a shortfall in yield, is contrary to law, facts, and without jurisdiction, as per the CGST Act, 2017? The petitioner argued that the impugned Assessment Order was illegal and sought its setting aside, directing the 3rd respondent to pay the GST liability. The petitioner contended that the by-products retained by them should not be subject to GST as part of the consideration for milling services. The revenue (1st respondent) had passed the assessment order levying GST on these by-products. The Court noted that the issue was squarely covered by a previous Division Bench order.
Sections Cited
CGST Act, 2017
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HON’BLE SRI JUSTICE C. PRAVEEN KUMAR & HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P. No. 25062 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 CGST 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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