M/S. Sri Venkata Laxmi Siva Sai Rice Mill vs. The Assistant Commissioner (State Taxes)
Held
The Court allowed the writ petition, stating 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. The operative portion of that prior order set aside the levy of GST on the value of by-products (broken rice, bran, and husk) treating them as part of the consideration paid for milling paddy. By allowing the present writ petition in terms of the said order, the Court implicitly held that the petitioner is not liable to pay GST on the custom milling charges, or at least on the portion related to by-products, consistent with the precedent. The reasoning is based on the binding precedent established by the Division Bench. The operative direction was to allow the writ petition in terms of the cited order, with no order as to costs.
Facts
The petitioner filed a writ petition challenging an order dated 19.09.2019 passed by the 1st Respondent (authority not specified but implied to be a 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 sought a direction for the 2nd Respondent to bear the liability if it was found payable. The petitioner argued the order was illegal, arbitrary, contrary to law, and violative of natural justice. The 1st Respondent is the revenue authority, and the 2nd Respondent is a corporation from which the petitioner received milling charges.
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 19.09.2019 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 in gross violation of the principles of natural justice, and passed without authority of law and jurisdiction. They sought to be declared not liable for GST on custom milling charges. Revenue's contention: The judgment records no specific arguments from the revenue or State respondents regarding their stance on the GST liability for custom milling charges. However, the existence of the impugned order suggests they asserted such liability.
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.18966 OF 2019
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 Mandamus or any other appropriate Writ or order or direction, setting aside the order of the 1st Respondent dated 19.9.2019 for the period July, 2017 to November, 2018 (Central GST), as illegal, arbitrary and contrary to law, in gross violation of principles of natural justice and without authority of law and jurisdiction, and set aside the same and consequently declare that the Petitioner is not liable to GST on the value of custom milling charges received from the 2nd Respondent Corporation or in the alternative, direct the 2nd Respondent Corporation to bear the liability if it is held to be payable, and pass….”
Heard Sri K.Srinivasa Rao, learned counsel for the petitioner, learned Government Pleader for Commercial Taxes appearing for respondent Nos.1 and 4, Sri P.Hemachandra, learned Standing Counsel appearing for respondent Nos.2
The judgment continues below.
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