M/S. Venkata Srinivasa Rice Traders vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petitions at the stage of admission. Following its previous order dated 20-11-2020 in W.P.No.45971 of 2018, and for the reasons recorded therein, the Court set aside the impugned orders. Specifically, 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 petitioners for milling paddy, was deemed unsustainable. The ratio decidendi is that such by-products, generated during the milling process, should not be included in the taxable value of the milling service as part of the consideration. The operative direction was to set aside the impugned orders to the extent they related to the levy of GST on these by-products. No costs were awarded. Miscellaneous petitions pending in these writ petitions were closed.
Facts
The petitioners filed multiple writ petitions challenging orders passed by the revenue authorities. The core of the dispute involved the levy of Goods and Services Tax (GST) on the value of by-products, specifically broken rice, bran, and husk, which were treated as part of the consideration received by the petitioners for milling paddy. The tax period(s) are not explicitly stated. The petitioners are aggrieved by the impugned orders that imposed GST on these by-products. The procedural history indicates that these writ petitions were taken up for admission.
Key Issues
1. Whether the levy of GST on the value of by-products (broken rice, bran, and husk) is legally sustainable when these are generated during the milling of paddy and are not part of the primary consideration for the milling service? (Question of law, concerning the definition of 'supply' and 'consideration' under the GST Act). Petitioner's contention: The petitioners argued that the issue in these writ petitions is covered by a previous order of this Court dated 20-11-2020 in W.P.No.45971 of 2018. They relied on this precedent for their argument. Revenue's contention: The learned Government Pleader for Commercial Tax agreed with the petitioners' submission that the issue is covered by the aforementioned order of this Court.
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HON’BLE SRI JUSTICE A.V.SESHA SAI & HON’BLE SRI JUSTICE K.SURESH REDDY
W.P.Nos.24011, 24024, 24049, 24063, 24068, 24085, 24109, 24122 AND 24130 of 2020
COMMON ORDER: (Per AVSS,J)
When these matters are taken up, it is submitted by both the learned counsel for the petitioners and the learned Government Pleader for Commercial Tax that the issue in the present writ petitions is covered by the order, dated 20-11-2020, passed by this Court in W.P.No.45971 of 2018. A copy of the said order is placed on record.
Following the above said order and for the reasons recorded therein, these writ petitions are allowed, at the stage of admission, setting aside the orders impugned insofar as the same relate to the levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of consideration paid to the petitioners for milling of the paddy. No costs.
Miscellaneous Petitions pending in the above writ petitions, if any, shall stand closed in consequence.
_______________ A.V.SESHA SAI,J
___________________ K.SURESH REDDY,J
17th DECEMBER,2020 TSNR
The judgment continues below.
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