M/S. Sri Venkateswara Traders vs. The Assistant Commissioner (St)

Held

The Court allowed the writ petition, following a previous order dated 20.11.2020 passed by a Division Bench in W.P.No.45971 of 2018. In that prior case, the assessment order was set aside insofar 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. The reasoning was that the levy on these by-products, in the context of compensation for milling, was incorrect. The operative direction was to set aside the impugned assessment order to that extent. No costs were awarded.

Facts

The petitioner filed a writ petition challenging an assessment order dated 29.10.2020 passed by the 1st respondent for the tax period July 2017 to November 2018 under the CGST Act, 2017. The challenge was specifically against the levy of GST on the value of broken rice, bran, and husk retained by the petitioner as compensation for milling paddy for the 3rd respondent. The petitioner sought to set aside the assessment order and direct the 3rd respondent to pay the GST liability. The Court was informed that the issue was covered by a previous Division Bench order.

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, is contrary to law, facts, without jurisdiction, and illegal, as per the CGST Act, 2017? Petitioner's contention: The petitioner argued that the assessment order was illegal and without jurisdiction, particularly concerning the levy of GST on the by-products retained as compensation. Revenue's contention: The judgment does not record any specific arguments made by the revenue or the 1st respondent. However, the assessment order itself indicates the revenue's position in levying GST on the said by-products.