M/S. Voleti Srinivasa Gupta vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, setting aside the impugned Assessment Order. The Court noted 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. In that prior case, the Division Bench had set aside an assessment order concerning 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 in the cited order was that these by-products, when retained by the miller, should not be treated as part of the consideration for milling services. Consequently, the present writ petition was allowed in terms of that earlier judgment. No costs were awarded. The Registry was directed to annex a copy of the order from W.P.No.45971 of 2018 to the present order.
Facts
The petitioner filed a writ petition challenging an Assessment Order dated 28.10.2020, passed by the 1st respondent (Revenue) under the SGST Act, 2017, 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 obtained during the milling of paddy. These by-products were allowed to be retained by the petitioner as compensation for supplying their own rice to the 3rd respondent to make up for yield shortfalls, in addition to milling charges of Rs. 15/- per quintal. The petitioner sought to set aside this assessment order and direct the 3rd respondent to pay the GST liability.
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 services, is contrary to law, facts, and jurisdiction under the SGST Act, 2017? Petitioner's Argument: The petitioner argued that the Assessment Order was illegal and without jurisdiction. They contended that the by-products retained were not part of the consideration for milling services but rather compensation for making up for yield shortfalls. Revenue's Argument: The judgment does not record any specific arguments made by the Revenue. However, the Assessment Order itself indicates the Revenue's stance of levying GST on these by-products as part of the consideration.
Sections Cited
SGST Act, 2017
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HON’BLE SRI JUSTICE C. PRAVEEN KUMAR & HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P. No. 24347 of 2020
O R D E R:- (Per Hon’ble Sri Justice C.Praveen Kumar)
This writ petition is filed for the following substantive relief: “….to issue a writ of mandamus holding that the impugned Assessment Order passed by the 1st respondent vide Ref.No.A2- 11/CMR/2019, dated 28.10.2020 for the tax period July, 2017 to November, 2018 under the SGST Act, 2017 insofar as it relates to the levy of GST on the value of the broken rice, bran and husk obtained in the course of Milling of the paddy of the 3rd respondent, allowed to be retained by the petitioner, in addition to the milling charges of Rs.15/- per quintal as compensation/exchange for the own rice supplied by the petitioner to the 3rd respondent to make up for the short fall in the yield, as contrary to law, facts, without jurisdiction and authority and illegal and consequently set aside the same and further direct the 3rd respondent to pay the GST liability on the petitioner either directly to the 1st respondent or to the petitioner.”
Heard the learned counsel for both the p
The judgment continues below.
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