M/S. Mahalaxml Rice Mill vs. The Assistant Commissioner (St)
Held
The Court allowed the writ petition, holding that the issue 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 insofar as it related to the levy of GST on the value of by-products (broken rice, bran, and husk) by treating them as part of the consideration paid for milling paddy. The ratio decidendi is that by-products retained by a miller as compensation for supplying their own rice to meet a yield shortfall are not exigible to GST as part of the milling charges. The Court directed that the present writ petition be allowed in terms of the aforementioned Division Bench order. No costs were ordered.
Facts
The petitioner filed a writ petition challenging an Assessment Order dated 10.01.2019 and consequential Recovery Proceedings dated 18.11.2020, passed by the 1st respondent (Revenue). The dispute pertains to the tax period 2017-2018 and concerns the levy of GST on the value of broken rice, bran, and husk. 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 paddy milling yield. The petitioner contended that this levy was illegal and without jurisdiction. The Court was informed that the issue was squarely covered by a previous Division Bench order.
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 a shortfall in yield, is contrary to law, facts, and without jurisdiction? The petitioner argued that the impugned assessment order and recovery proceedings were illegal, without jurisdiction, and contrary to law. They contended that the by-products retained were not part of the consideration for milling services but rather compensation for supplying their own rice to the 3rd respondent to meet the milling requirements. The Revenue's contentions are not explicitly recorded in the judgment, but their action of levying GST implies they considered these by-products as taxable supply or part of the consideration for milling.
Sections Cited
CGST Act
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. 23404 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 vide Ref.No. GSTIN: 37ANIPG7286R1ZO, dated 10.01.2019, consequential order of Recovery Proceedings dated 18.11.2020 passed by the 1st respondent for the tax period 2017- 2018, 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, 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 or in the alternative 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 f
The judgment continues below.
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