GST on retained milling by-products not leviable; pending appeal without stay did not weaken binding precedent.

GST could not be levied on the value of broken rice, husk and bran retained by rice millers after milling paddy supplied under the Public Distribution Scheme, because an earlier Division Bench had already held such retained by-products not taxable. The mere filing of a Special Leave Petition against that judgment, without any stay or suspension, did not make the precedent inoperative. On that basis, the assessment orders relying on GST liability over the retained by-products were unsustainable and were set aside.

---

---

Issues: Whether GST could be levied on the value of broken rice, husk and bran retained by the rice millers after milling paddy for the Public Distribution Scheme, and whether the assessment orders could be sustained merely because the earlier Division Bench judgment had been carried in appeal without any stay.

Analysis: The petitioners were engaged in milling paddy supplied by the Civil Supplies Corporation and were entitled to retain the by-products, namely husk, broken rice and bran. The Court noted that an earlier Division Bench had already held that no GST was leviable on the value of such retained by-products. It further held that the mere pendency of a Special Leave Petition, in the absence of any stay or suspension of the earlier judgment, did not render that decision inoperative. On that basis, the impugned assessment orders were found unsustainable.

Conclusion: GST could not be levied on the value of the broken rice, husk and bran retained by the petitioners, and the assessment orders were set aside in favour of the petitioners.

---