M/S. Sri Vasanthalaxmi Modern Rice Mill vs. Assistant Commissioner Of State Tax

Held

The Court allowed the Writ Petition in terms of a previous order dated 20.11.2020 passed by a Division Bench in W.P.No.45971 of 2018. The previous order had set aside the levy of GST on the value of by-products, namely broken rice, bran, and husk, by treating them as part of the consideration paid to the petitioner for milling of paddy. The reasoning was that the impugned assessment order, in so far as it related to the levy of GST on these by-products, was erroneous. The Court found that the issue in the present writ petition was squarely covered by the aforesaid order. Therefore, the levy of GST on the by-products was quashed. No costs were awarded.

Facts

The petitioner filed a Writ Petition challenging an order dated 25.8.2020 passed by the 2nd Respondent, which confirmed an order dated 5.1.2019 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 to declare that it is not liable to pay GST on the value of brokens, bran, and husk, which are retained as by-products during the milling of paddy for the 5th Respondent. The petitioner also sought a direction for the 5th Respondent to pay GST at 5% on the Custom Milled Rice charges. The petitioner is the assessee, and respondents 1-3 are revenue authorities, while respondent 5 is the entity for whom milling was done.

Key Issues

1. Whether the petitioner is liable to pay GST on the value of by-products (brokens, bran, and husk) retained during the milling of paddy, treating them as part of the consideration for milling services, under the CGST/Andhra Pradesh SGST Act? Petitioner's Contention: The petitioner argued that they are not liable to pay GST on the value of brokens, bran, and husk, as these are by-products. They sought a declaration to this effect and a direction for the 5th Respondent to pay GST on milling charges. Revenue's Contention: The revenue authorities, through the learned Government Pleader, did not present separate arguments but agreed with the petitioner's submission that the issue is covered by a previous High Court order. Similarly, the learned Standing Counsel for the 5th Respondent also agreed that the issue is covered by the aforementioned order.