M/S. Valli Naga Durga Rice Traders vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, following a previous order passed by a Division Bench of the same High Court on 20.11.2020 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 for the prior order, which is adopted here, was that such levy was improper. The operative direction was to set aside the impugned assessment order to the extent of the levy on by-products. No costs were awarded. The Court directed the registry to annex a copy of the previous order to the current judgment.
Facts
The petitioner filed a writ petition challenging an assessment order dated 30.10.2020, passed by the 1st respondent 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 retained by the petitioner as compensation for supplying their own rice to the 3rd respondent to make up for a shortfall in yield, in addition to milling charges. 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 paddy and making up for shortfalls in rice yield, is contrary to law, facts, and without jurisdiction. Contentions of the Petitioner: The petitioner argued that the assessment order was illegal and without jurisdiction, as the levy of GST on the by-products retained by them was not permissible. They sought the setting aside of the order and a direction for the 3rd respondent to pay the GST liability. Contentions of the Revenue/State: The judgment does not record any specific arguments made by the revenue or state. It notes that the issue was squarely covered by a previous order of the Court.
Sections Cited
CGST Act, 2017
AI-generated summary — verify with the full judgment below
HON’BLE SRI JUSTICE C. PRAVEEN KUMAR & HON’BLE SRI JUSTICE B. KRISHNA MOHAN
W.P. No. 23748 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 30.10.2020 for the tax period from July, 2017 to November, 2018, under the CGST 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 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 judgment continues below.
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