M/S. Boyina Visweswara Rao vs. Assistant Commissioner Of State Tax
Held
The Court allowed the writ petitions at the stage of admission. It set aside the impugned orders specifically concerning the levy of GST on the value of by-products (broken rice, bran, and husk). The Court reasoned that these by-products should not be treated as part of the consideration paid to the petitioners for the milling of paddy. The ratio decidendi is that the value of by-products generated during a service, which are not explicitly part of the agreed consideration for the service itself, cannot be added to the service value for GST levy. The operative direction was to set aside the impugned orders to the extent they levied GST on the by-products. No costs were awarded. No issues were expressly left undecided.
Facts
The petitioners filed two 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 the revenue authorities treated as part of the consideration received by the petitioners for milling paddy. The petitioners contended that these by-products should not be taxed as part of the milling consideration. The present writ petitions were taken up for admission.
Key Issues
1. Whether the by-products, namely broken rice, bran, and husk, generated during the milling of paddy, should be treated as part of the consideration for the milling service for the purpose of levying GST? (Question of law) Petitioner's Argument: The petitioners argued that the by-products are not part of the consideration for the milling service. They relied on the principle that only the value of services rendered should be taxed. The judgment does not explicitly mention specific authorities or precedents cited by the petitioners, but it indicates their stance was that the by-products were distinct from the milling consideration. Revenue's Argument: The revenue authorities, through their impugned orders, treated the value of these by-products as part of the consideration for the milling service, thereby levying GST on them. The judgment does not record specific arguments made by the revenue at this stage, but their action implies they considered the by-products as taxable consideration.
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HON’BLE SRI JUSTICE A.V.SESHA SAI & HON’BLE SRI JUSTICE K.SURESH REDDY
W.P.Nos.24003 and 24065 of 2020
COMMON ORDER: (Per AVSS,J)
When these two 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
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