M/S Sri Venkatachalapathi Rice Traders vs. The Assistant Commissioner
Held
The Court allowed the writ petition, following a previous order dated 20.11.2020 passed by a Division Bench of the same High Court 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 was improper. Consequently, the present writ petition was allowed in terms of the aforementioned Division Bench order. No costs were awarded. The Registry was directed to annex a copy of the previous order to the present judgment.
Facts
The petitioner filed a writ petition challenging an Assessment Order dated 31.10.2020, passed by the 1st respondent for the tax period July 2017 to November 2018 under the SGST Act, 2017. The challenge was specifically to the levy of GST on the value of broken rice, bran, and husk. These by-products were obtained during the milling of paddy belonging to the 3rd respondent and were allowed to be retained by the petitioner. The petitioner also received milling charges of Rs. 15/- per quintal as compensation/exchange for supplying their own rice to the 3rd respondent to make up for any shortfall in yield. The petitioner sought to set aside the 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 by-products of paddy milling, in addition to milling charges, is contrary to law, facts, and without jurisdiction, under the SGST Act, 2017? Petitioner's Contention: The petitioner argued that the assessment order was illegal and sought its setting aside. They contended that the levy of GST on the by-products retained by them was improper. Revenue's Contention: The judgment does not record any specific arguments or contentions made by the revenue or the 1st respondent. The Court noted that the issue was squarely covered by a previous order of a Division Bench.
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. 24305 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 31.10.2020 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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