M/S. Veerabhadreswara Raw And Boiled Rice Mill vs. The Assistant Commissioner (S.T)

Held

The Court allowed the writ petition, setting aside the impugned order. The Court's decision was based on the submission by both parties that the issue was covered by a previous order of the High Court dated 20-11-2020, passed in W.P.No.45971 of 2018. The Court followed the reasoning and findings of that prior order. Consequently, the levy of GST on the value of by-products, namely broken rice, bran, and husk, treating them as part of the consideration paid for the milling of paddy, was deemed unsustainable and was set aside. The operative direction was to set aside the impugned order to the extent it related to the levy of GST on these by-products. No costs were awarded. Any pending miscellaneous petitions were also closed.

Facts

The petitioner filed a writ petition challenging an order that levied Goods and Services Tax (GST) on the value of by-products, specifically broken rice, bran, and husk, treating them as part of the consideration for milling paddy. The revenue or State was represented by the Government Pleader for Commercial Tax. The specific tax period and the authority that passed the impugned order are not explicitly stated in the provided text. The procedural history relevant to this judgment is that the matter was brought before the High Court via a writ petition. Both parties submitted that the issue was covered by a previous order of the same High Court.

Key Issues

1. Whether the levy of GST on the value of by-products (broken rice, bran, and husk) arising from the milling of paddy, by treating them as part of the consideration for milling services, is legally sustainable? Petitioner's contention: The petitioner argued that the by-products are not part of the consideration for milling services and therefore, GST should not be levied on their value. The petitioner relied on the order passed by the High Court in W.P.No.45971 of 2018, which they contended covered the present issue. Revenue/State's contention: The learned Government Pleader for Commercial Tax submitted that the issue in the present writ petition is covered by the order, dated 20-11-2020, passed by this Court in W.P.No.45971 of 2018. This implies the revenue did not contest the petitioner's claim based on the previous order.