M/S. Sri Venkateswara Modern Rice Mill vs. The Assistant Commissioner (State Taxes)

Held

The High Court allowed the writ petitions, setting aside the impugned orders. The Court's decision was based on the submission by both parties that the issue was covered by the High Court's prior order dated 20.11.2020 in W.P.No.45971 of 2018. Consequently, the Court held that 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 milling paddy, was incorrect. The ratio decidendi is that if a similar issue has been decided by the High Court in a previous case, and both parties acknowledge this, the subsequent cases should follow the precedent. 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. No specific issue was left undecided.

Facts

The petitioners filed multiple writ petitions challenging orders passed by the revenue authorities. The core of the dispute concerned the levy of Goods and Services Tax (GST) on the value of by-products, specifically broken rice, bran, and husk, generated during the milling of paddy. The revenue authorities treated these by-products as part of the consideration received by the petitioners for their milling services. The petitioners contested this classification and the consequent GST levy. The present writ petitions were heard together, and both the petitioners and the revenue authorities submitted that the issue was covered by a previous order of the High Court in W.P.No.45971 of 2018, dated 20.11.2020.

Key Issues

1. Whether the value of by-products (broken rice, bran, and husk) generated from milling paddy should be treated as part of the consideration for milling services, thereby attracting GST, as a question of law. Petitioner's Contention: The petitioners argued that the issue in these writ petitions is squarely covered by the High Court's order dated 20.11.2020 in W.P.No.45971 of 2018. They relied on this precedent for their claim that GST should not be levied on the value of these by-products as part of the milling consideration. Revenue's Contention: The learned Government Pleader for Commercial Tax also submitted that the issue is covered by the aforementioned order of the High Court. This indicates the revenue's agreement that the previous judgment's findings would apply to the present cases, implying they did not intend to argue against the precedent in this instance.