M/S Sri Ravi Teja Traders vs. The Assistant Commissioner (Sales Taxes)
Held
The Court allowed the Writ Petition, setting aside the impugned Assessment Order. The levy of GST on the value of by-products, namely broken rice, bran, and husk, treating them as part of the consideration paid to the petitioner for milling of the paddy, was set aside. The Court's decision was based on the submission by learned counsel for both sides that the issue was squarely covered by a previous order of a Division Bench of the same Court in W.P.No.45971 of 2018, dated November 20, 2020. The ratio decidendi is that byproducts retained by a miller are not to be treated as part of the consideration for milling services for the purpose of GST levy, a principle established in the cited precedent.
Facts
The petitioner filed a Writ Petition challenging an order dated May 27, 2020, passed by the 2nd Respondent, which affirmed an order dated January 8, 2019, by the 1st Respondent. These orders pertained to the tax period July 2017 to June 2018 and involved a dispute over liability to GST on byproducts retained by the 3rd Respondent Corporation. The petitioner sought to set aside these orders and declare non-liability to GST on the byproducts, or alternatively, to have the 3rd Respondent bear the liability. The impugned orders were passed by the revenue authorities.
Key Issues
1. Whether the levy of GST on the byproducts (broken rice, bran, and husk) retained by the 3rd Respondent Corporation, treating them as part of the consideration for milling paddy, is legally sustainable? Petitioner's contention: The petitioner argued that the byproducts retained by the 3rd Respondent Corporation were not liable to GST. The specific relief sought was to set aside the orders and declare non-liability, or alternatively, direct the 3rd Respondent to bear the liability. Revenue's contention: The revenue authorities, through their orders, had levied GST on these byproducts, treating them as part of the consideration for the milling services provided by the petitioner. The judgment does not explicitly record separate arguments from the revenue beyond what is implied by their impugned orders.
Sections Cited
None explicitly mentioned in the operative part of the judgment, but the dispute concerns the levy of GST on services and consideration.
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.15688 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 Mandamus or any other appropriate Writ or order or direction, setting aside the orders of the 2nd Respondent in AO.No.5209 dated 27.5.2020 affirming the order of the 1st respondent dated 8.1.2019 for the period July, 2017 to June, 2018, 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 byproducts retained by the 3rd Respondent Corporation, or in the alternative, direct the 3rd 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, 2 and 5 and Sri P.Hemachandra, learned Sta
The judgment continues below.
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