2021 (11) TMI 1177 - HC - GST

Levy of GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration paid to the petitioner for custom milling of the paddy - HELD THAT - It is common ground at the Bar that the issue stands covered by the decision of a Co-ordinate Bench in M/S. VASAVI AGR FOOD INDUSTRIES VERSUS THE ASSISTANT COMMISSIONER, THE A.P. STATE CIVIL SUPPLIES CORPORATION, THE DISTRICT MANAGER, STATE OF ANDHRA PRADESH, THE UNION OF INDIA 2021 (2) TMI 1369 - ANDHRA PRADESH HIGH COURT . In view thereof, the present Writ Petition also stands allowed in similar terms to the aforesaid order and accordingly the assessment order dated 30.08.2019 passed by the 1 st respondent, levying GST on the value of by-products i.e., broken rice, bran and husk treating them as part of the consideration paid to the petitioner for custom milling of the paddy, is set aside. However, it is made clear that the petitioner is liable to pay tax on sale of by-products, if they are statutorily taxable. Petition disposed off.

Summary

Issues:
1. Challenge to order of 1st Respondent dated 30.8.2019 for GST liability on byproducts.
2. Relief sought through Writ of Mandamus or alternative direction.
3. Application of decision from a Co-ordinate Bench in a similar case.
4. Disposal of the present Writ Petition based on the precedent.
5. Liability of petitioner for tax on sale of by-products if statutorily taxable.

Analysis:

The petitioner challenged the order of the 1st Respondent dated 30.8.2019, seeking relief through a Writ of Mandamus or alternative direction to set aside the order as illegal, arbitrary, and contrary to law. The petitioner contended that the order was in gross violation of natural justice and lacked authority of law and jurisdiction. The petitioner specifically aimed to declare non-liability to GST on the byproducts retained by the 2nd Respondent Corporation or, in the alternative, to direct the corporation to bear the liability if deemed payable.

The Court noted that the issue raised in the present case was already addressed by a Co-ordinate Bench in a prior decision dated 26.02.2021 in a similar matter. Consequently, the present Writ Petition was allowed in alignment with the previous order. The assessment order dated 30.08.2019, which imposed GST on the value of by-products like broken rice, bran, and husk, considering them part of the payment for custom milling of paddy, was set aside. However, the Court clarified that the petitioner would be liable to pay tax on the sale of by-products if they are deemed statutorily taxable. No costs were awarded in this regard.

Furthermore, the judgment disposed of any miscellaneous petitions pending in connection with the case. The decision emphasized the application of legal principles, adherence to precedent, and the necessity for statutory compliance in determining tax liabilities on by-products. The ruling provided clarity on the petitioner's liability while upholding the importance of legal procedures and statutory provisions governing tax assessments.