M/S. Sri Maruthi Sai Lakshmi Traders vs. The Assistant Commissioner

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 impugned assessment order, in so far as it related to the levy of GST on the value of by-products (broken rice, bran, and husk) treated as part of the consideration paid for milling paddy, was set aside. The reasoning was that the issue was squarely covered by the prior judgment. The operative direction was to set aside the assessment order concerning the by-products. No costs were awarded. No issues were expressly left undecided.

Facts

The petitioner filed a writ petition challenging an assessment order passed by the First Respondent for the tax period July 2017 to November 2018. The challenge was specifically to the levy of GST on the value of broken rice, bran, and husk, which were by-products of paddy milling. These by-products were retained by the petitioner as compensation for supplying their own rice to the third respondent to make up for yield shortfalls. The petitioner sought to set aside the assessment order and direct the third respondent to pay the GST liability. The petitioner is the entity that retained the by-products, and the respondents are the tax authorities and the third-party rice miller.

Key Issues

1. Whether the levy of GST on the value of broken rice, bran, and husk, retained by the petitioner as compensation for milling paddy and making up for yield shortfalls, is contrary to law, facts, and without jurisdiction. The petitioner argued that the assessment order was illegal and without jurisdiction, as the levy of GST on the by-products was improper. The revenue (represented by the Government Pleader) and the third respondent (the rice miller) submitted that the issue was covered by a previous order of the High Court. They did not present separate arguments but agreed that the matter was resolved by the precedent.