M/S. Sri Amma Bhagavan Modern Rice Mill vs. Assistant Commissioner Of State Tax
Held
The Court allowed the Writ Petition, following a previous order dated November 20, 2020, passed by a Division Bench in W.P.No.45971 of 2018. The operative portion of the cited order set aside the levy of GST on the value of by-products, specifically broken rice, bran, and husk, treating them as part of the consideration paid to the petitioner for milling of paddy. The reasoning was that these by-products were not to be considered as part of the consideration for the milling service. The Court directed that the impugned assessment order, in so far as it related to the levy of GST on these by-products, be set aside. The issue regarding the GST on Custom Milled Rice charges was not explicitly addressed in the operative part of the judgment, but the overall allowance of the petition implies relief on that front as well, based on the precedent.
Facts
The petitioner filed a Writ Petition seeking to quash an order dated August 20, 2020, passed by the 2nd respondent, which confirmed an order dated January 5, 2019, passed by the 1st respondent. These orders pertained to the tax period from July 2017 to June 2018 under the CGST/Andhra Pradesh SGST Act. The petitioner sought a declaration that they are not liable to pay GST on the value of brokens, bran, and husk retained as by-products during paddy milling for the 5th respondent. Additionally, the petitioner sought a direction for the 5th 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 brokens, bran, and husk, which are retained as by-products in the course of milling paddy for the 5th respondent, under the CGST/Andhra Pradesh SGST Act. Petitioner's contention: The petitioner argued that these by-products are not part of the consideration for milling services and therefore not subject to GST. Revenue's contention: The revenue contended that the value of these by-products should be included in the taxable value of the milling service provided by the petitioner. The judgment does not explicitly record arguments from the revenue on this point, but the impugned order implies this position.
Sections Cited
CGST Act, Andhra Pradesh SGST Act
AI-generated summary — verify with the full judgment below
THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE R.RAGHUNANDAN RAO WRIT PETITION No.24722 OF 2020
ORDER:- (Per Hon’ble Sri Justice C.Praveen Kumar)
The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:- “……..to issue a Writ of Certiorari or any other appropriate writ or order or direction quashing the order of the 2nd respondent in order No.ZH370820OD29014, dated 20.08.2020, confirming the orders passed by the 1st respondent, dated 05.01.2019 passed for the tax period from July, 2017 to June, 2018 under the CGST/Andhra Pradesh SGST Act and declare that the petitioner is not liable to pay tax on the value of the brokens, bran and husk, which are allowed to be retained as byproducts in the course of milling of the paddy for the 5th respondent and further direct the 5th respondent to pay GST @ 5% on the value of the Custom Milled Rice charges of Rs.15/- per quintal.”
Heard Sri K.V.J.L.N.Sastry, learned counsel for the petitioner, learned Government Pleader for Commercial Taxes appearing for respondent Nos.1 to 3, Sri N.Harinath, learned Standing
The judgment continues below.
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