IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVAT (Special Original Jurisdiction) ■ i WEDNESDAY, THE NINETEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R.RAGHUNANDAN RAO AND THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM WRIT PETITION Nos: 3769 & 3796 of 2025 WRIT PETITION NO: 3769 OF 2025 Between: M/s Sri Kodandarama Boiled And Raw Rice Mill, rep. by its Partner, Mr. K. Satyanarayana Reddy Pandalapaka - 533345, Bokkavolu Mandal East Godavari District, Andhra Pradesh . ...Petitioner AND The Assistant Commissioner, Central GST Division, Srinagar, Morampudi Road, Rajamahendravaram - 533107 The A.P. State Civil Supplies Corporation, Rep. by its Managing Director 10-52/1,4^'' Floor, Sri Sai Towers Ashok Nagar, Beside Siris Limited Bandar Road, Kanur, Vijayawada 520007 Andhra Pradesh. The District Manager, The Andhra Pradesh Civil Supplies Corporation East Godavari District, Andhra Pradesh The State of Andhra Pradesh, rep. by its Principal Secretary to Government, Revenue (CT-II) Department, Secretariat, Amaravathi. The Union of India, Rep. by its Secretary (Finance) Ministry of Finance North Block, Central Secretariat, New Delhi 110001. 1. 2. 3. 4. 5. ...Respondents Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or order or direction, setting aside the order of the 1®‘ Respondent dated 25.10.2024 for the period July 2017 to March 2020, as illegal, arbitrary and contrary to law, in gross violation of principles of natural justice and without authority of law and jurisdiction, and set aside the same and consequently declare that the Petitioner is not liable to GST on the byproducts retained by the 2"’"' Respondent Corporation, or in the alternative, direct the 2"*^ Respondent Corporation to bear the liability if it is held to be payable. 4t v- lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of collection of the disputed demand of Rs.26,53,918/- (Tax), Rs.26,73,918/- (Penalty) and also the interest for the period July 2017 to March, 2020 under the APGST Act, pending disposal of the Writ Petition, as otherwise the Petitioner will be put to severe loss and hardship. Counsel for the Petitioner: SRI SRINIVASA RAO KUDUPUDI Counsel for the Respondents 1 & 4: GP FOR COMMERCIAL TAX Counsel for the Respondents 2 & 3: SRI P HEMA CHANDRA (SC FOR CIVIL SUPPLIES CORP LTD) WRIT PETITION NO: 3795 OF 2025 Between: M/s. SRI RAMALINGESWARA RICE MILL OWNERS, KOWURI HANUMANTHA REDDY and OTHERS rep. by its Managing Partner, Mr. K. Hanumantha Reddy Kuthukuluru- 533264, Anaparthi Mandal East Godavari District, Andhra Pradesh ...Petitioner AND 1. The Assistant Commissioner (Central Tax), Central GST Division Srinagar, Morampudi Road, Rajamahendravaram - 533107 2. The A.P. State Civil Supplies Corporation, Rep. by its Managing Director 10-52/1,4" Floor, Sri Sai Towers Ashok Nagar, Beside Siris Limited Bandar Road, Kanur, Vijayawada - 520007, Andhra Pradesh. 3. The District Manager, The Andhra Pradesh Civil Supplies Corporation East Godavari District, Andhra Pradesh. 4. State of Andhra Pradesh, rep. by its Principal Secretary to Government, Revenue (CT-II) Department, Secretariat, Amaravathi. 5. The Union of India, Rep. by its Secretary (Finance) Ministry of Finance, North Block, Central Secretariat, New Delhi 110001. ...Respondents Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or order or direction, setting aside the order of the 1®' Respondent dated 24.10.2024 for the period July 2017 to March 2020, as illegal, arbitrary and contrary to law, in gross violation of principles of natural justice and without authority of law and jurisdiction, and set aside the same and consequently declare that the Petitioner is not liable to GST on the byproducts retained by the 2^^ Respondent Corporation, or in the alternative, direct the 2 Respondent Corporation to bear the liability if it is held to be payable. nd lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of collection of the disputed demand pf Rs.29,42,450/- (Tax), Rs.29,62,450/- (Penalty) and also the interest for the period July 2017 to March, 2020 under the APGST Act, pending disposal of the Writ Petition, as otherwise the Petitioner will be put to severe loss and hardship. Counsel for the Petitioner: SRI SRINIVASA RAO KUDUPUDI Counsel for the Respondents 1 & 4: GP FOR COMMERCIAL TAX Counsel for the Respondents 2 & 3: SRI P HEMA CHANDRA (SC FOR CIVIL SUPPLIES CORP LTD) Counsel for the Respondents 2 & 3: SRI PASALA PONNA RAO DEPUTY SOLICITOR GENERAL OF INDIA The Court made the following common order: fft. APHC010069182025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3508] 0^--- WEDNESDAY, THE NINETEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM WRIT PETITION NO: 3769/2025 Between: ...PETITIONER M/s Sri Kodandarama Boiled And Raw Rice Mill AND ...RESPONDENT(S) The Assistant Commissioner and Others WRIT PETITION NO: 3795/2025 Between: ...PETITIONER M/s. Sri Ramalingeswara Rice Mill Owners AND ...RESPONDENT(S) The Assistant Commissioner central Tax and Others Counsel for the Petitioner: 1.SRINIVASA RAO KUDUPUDI Counsel for the Respondent(S): 1.P HEMA CHANDRA (SC FOR CIVIL SUPPLIES CORP LTD) 2.GP FOR CIVIL SUPPLIES 3.GP FOR COMMERCIAL TAX 2 RRR,J & MRK,J W.P.Nos.3769 & 3795 of 2025 The Court made the following Common Order: (per Hon’ble Sri Justice R. Raghunandan Rao) Since the issue arising in both these cases are similar and they are being disposed of by way of this common order. Heard Sri Srinivasa Rao Kudupudi, learned counsel for the petitioners 2. St Smt. Santhi Chandra, learned Standing Counsel appearing for the 1 respondent, Sri P. Hema Chandra, learned Standing Counsel appearing for the respondents 2 & 3 and the learned Government Pleader for Commercial Tax appearing for the respondents,. The petitioners herein, are rice millers, who undertake milling of paddy 3. for distribution of rice under the Public Distribution Scheme. For this purpose, the 3'^^ respondent-corporation hands over paddy, which has to be milled by the petitioners, at a conversion charge of Rs.15/- per quintal of paddy milled. The petitioners, under the contract are required to supply rice equal to 67% of the paddy, given for milling, irrespective of whether such rice is obtained from paddy or not. The 3'^ respondent-Civil Supplies Corporation is only entitled to the rice from the said paddy and the by-products such as husk, broken rice & bran remain the property of the petitioners. 4. 3 RRR,J & MRK,J W.P.Nos.3769 & 3795 of 2025 In the present cases, the respective petitioners had retained husk, broken rice & bran and sold them separately. No tax is payable on the sale of broken rice and husk. However, tax @ 5% was paid on the sale of bran. 5. ---r The 1®’ respondent, sought to levy G.S.T. not only on the conversion charges but only on the estimated value of broken rice, bran and husk, on the ground that, the said products also amount to compensation or consideration for milling the rice. 6. 7. Similar demands were raised earlier, in the cases of other millers, who had undertaken milling of paddy for Public Distribution Schemes. This Court, by its judgment, dated 20.11.2020, in W.P.No.45971 of 2018, had held that, no G.S.T. could be levied on the value of the husk, broken rice and bran retained by the millers. The State, has gone in Appeal, by way of a Special Leave Petition, before the Hon’ble Supreme Court, which is still pending. However, no stay or suspension of the order of this Court has been passed. 8. \ The petitioners herein, had informed the 1®‘ respondent that, the demands of this nature had already been struck down by a Division Bench of this Court in the aforesaid judgment and as such, there could be no levy of tax on this turnover. The 1®‘ respondent, has taken a curious stand. He held that, the absence of a stay by the Hon’ble Supreme Court would somehow render 9. 4 RRR,J & MRK,J i'- W.P.Nos.3769 & 3795 of 2025 the judgment of the High Court in operative. On that basis, he proceeded to pass assessment orders. The stand of the 1^* respondent is not only incompressible but invalid. 10. The judgment of the Division Bench of this Court, dated 20.11.2020, in 11. W.P.No.45971 of 2018, \A/ould be squarely applicable to these cases also and no G.S.T. can be levied on the value of the broken rice, husk & bran retained by the petitioners, after completion of the milling of the paddy entrusted to them by the 2'^^ respondent-Civil Supplies Corporation. Accordingly, these Writ Petitions are allowed setting aside the 12. impugned assessment orders, dated 25.10.2024 & 24.10.2024. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. Sd/- K. SRINIVASA RAJU ASSISTANT REGI^RAR ' //TRUE COPY// SECTION OFFICER To, 1. The Assistant Commissioner (Centr^ Tax), Central GST Division, Srinagar, Morampudi Road, Rajamahendravaram - ^^^lO/ 2. The Managing Director, A.P. State Civil Supplies ’ 4**^ Floor Sri Sai Towers Ashok Nagar, Beside Sins Limited Bandar Rnad Kanur Viiavawada 520007 Andhra Pradesh. 3 The District Manager, The Andhra Pradesh Civil Supplies Corporation East Godavari District, Andhra Pradesh n«nartment 4 The Principal Secretary to Government, Revenue (CT-11) Department, State of Andhra Pradesh, Secretariat, Amaravati, Guntur District 5 The Secretary (Finance) Ministry of Finance, Union of India, Nort Block, Central Secretariat, New Delhi 110001. 6 One CC to Sri Srinivasa Rao Kudupudi, Advooate [OPUC] . .. Sri Pasala Ponna Rao, Deputy Solicitor General of India 8 ^ne^CC to Sri P Hema Chandra, (SC for Civil Supplies Corp. Ltd.) [OPUC] 9. Two CCs to [OUT] 10.Two CCs to 11 .Two CD Copies 7. One CC to GP for Commercial Tax, High Court of Andhra Pradesh. GP for Civil Supplies, High Court of Andhra Pradesh. [OUT] RAM HIGH COURT DATED; 19/02/2025 ■ofANDW^ X 10 MAR 2025 COMMON ORDER WP.Nos.3769 & 3795 of 2025 mr S' Current Siection ALLOWING BOTH THE WPs WITHOUT COSTS