M/S. Sri Venkata Padmavathi Rice Mill vs. The Assistant Commissioner (State Taxes)

Held

The Court allowed the writ petition, following a previous order passed by a Division Bench of the same High Court in W.P.No.45971 of 2018. The previous order had set aside an assessment order in so far as it related to the levy of GST on the value of by-products (broken rice, bran, and husk) by treating them as part of the consideration paid for milling paddy. By allowing the present writ petition in terms of the previous order, the Court implicitly held that the petitioner is not liable to GST on the value of custom milling charges, or at least on the components that were the subject of the prior ruling. The operative direction was to allow the writ petition, mirroring the relief granted in the precedent case. No costs were awarded.

Facts

The petitioner filed a writ petition challenging an order dated 21.09.2019 passed by the 1st Respondent (Central GST authority) for the period July 2017 to November 2018. The petitioner sought to set aside the order, declaring that they are not liable to pay GST on custom milling charges received from the 2nd Respondent Corporation. Alternatively, they requested the 2nd Respondent to bear the liability if it was deemed payable. The petitioner argued that the order was illegal, arbitrary, contrary to law, and passed in violation of natural justice and without jurisdiction. The revenue, represented by various respondents, was also involved in the proceedings.

Key Issues

1. Whether the petitioner is liable to pay GST on the value of custom milling charges received from the 2nd Respondent Corporation, considering the impugned order dated 21.09.2019 passed by the 1st Respondent for the period July 2017 to November 2018. Petitioner's contention: The petitioner argued that the order was illegal, arbitrary, contrary to law, and passed in gross violation of principles of natural justice and without authority of law and jurisdiction. They sought a declaration that they are not liable to GST on custom milling charges. Revenue's contention: The revenue did not explicitly record arguments in the judgment. However, the fact that an order was passed by the GST authority implies a contention that GST was payable on the custom milling charges. The judgment notes that learned counsel on both sides submitted that the issue is covered by a previous order.