Andhra Pradesh High Court – Amravati
Mytrah Energy India Private Limited vs The Assistant Commissioner St Kavali … on 15 April, 2026
Author: R. Raghunandan Rao
Bench: R Raghunandan Rao
1
APHC010071522023
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3529]
(Special Original Jurisdiction)
WEDNESDAY,THE FIFTEENTH DAY OF APRIL
TWO THOUSAND AND TWENTY SIX
PRESENT
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
WRIT PETITION NO: 4725/2023
Between:
1. MYTRAH ENERGY INDIA PRIVATE LIMITED, REPRESENTED
THROUGH ITS AUTHORIZED REPRESENTATIVE, SHRI KRISHNA
RACHURI S/O. PRABHAKAR RACHURI AGED 43 YEARS, HAVING
ITS REGISTERED OFFICE AT 8001, Q-CITY, NANAKRAMGUDA,
GACHIBOWLI, HYDERABAD, TELANGANA - 500032 AND
PRINCIPAL PLACE OF BUSINESS AT SY NO. 292/2, JUTUR
VILLAGE, PATTIKONDA MANDAL, KURNOOL, ANDHRA PRADESH -
518380.
...PETITIONER
AND
1. UNION OF INDIA, THROUGH SECRETARY, MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE, NEW DELHI - 110001.
2. DEPUTY COMMISSIONER STATE TAX, OFFICES OF THE JOINT
COMMISSIONER (STATE TAX), KURNOOL SURVEY NO. 7/B, NEAR
INDUS MONTESSORI SCHOOL, GOOTY ROAD, KURNOOL,
ANDHRA PRADESH - 518002.
3. STATE OF ANDHRA PRADESH, THROUGH ITS PRINCIPAL
SECRETARY REVENUE(CT-II) DEPARTMENT, SECRETARIAT,
VELAGAPUDI, AMARAVATI, DISTRICT - GUNTUR, ANDHRA
PRADESH.
4. GOODS AND SERVICES TAX COUNCIL, 5TH FLOOR, TOWER II,
2
JEEVAN BHARTI BUILDING, JANPATH ROAD, CONNAUGHT PLACE,
NEW DELHI-110 001.
5. THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
NORTH BLOCK, DEPARTMENT OF REVENUE, MINISTRY OF
FINANCE, GOVERNMENT OF INDIA, NEW DELHI - 110001.
...RESPONDENT(S):
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 toi. A writ of Mandamus or any other order or direction to declare the
impugned Explanation inserted vide Notification No.24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to Sl.No.234 of Notification No.1/2017-
Central Tax (Rate) dated 28.06.2017, and the corresponding notifications
issued under the APGST act and IGST act as being manifestly arbitrary and
violative of Article 14, Article 19 1 g and Article 265 of Constitution of India,
1950. ii. A writ of Mandamus or any other order or direction to declare the
impugned Services Explanation inserted vide Notification No.27/2018-Central
Tax (Rate) dated 28.06.2017, and the corresponding notification issued under
the APGST Act and IGST Act, as being manifestly arbitrary and violative of
Article 14, Article 19(1)(g) and Article 264 of Constitution of India, 1950. iii. A
writ of Mandamus or any other order or direction to declare Section 16(2)(c) of
the CGST Act and the corresponding Section 16(2)(c) of the CGST Act and
the corresponding section 16(2)(c) of the APGST Act, as being arbitrary and
violative of Article 14 and Article 19(1)(g) of Constitution of India, 1950 since
the same imposes an unreasonable condition which is impossible to be
performed by the Petitioner. iv. iv. A writ of Mandamus or any other order or
direction to declare the impugned Circular as being arbitrary and violative of
Article 14 and Article 19(1)(g) of Constitution of India, 1950 since the same
seeks to create substantive disabilities on a retrospective basis not
comtemplated under the CGST Act. v. In the alternative to prayer clause (i)
supra., a writ of Mandamus or any other order or direction reading down the
impugned Explanation inserted vide Notification No.24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to Sl.No.234 of Notification No.1/2017 –
Central Tax (Rate) dated 28.06.2017, and the corresponding notifications
issued under the APGST Act and IGST Act, as being not mandatory and to
that extent allowing taxpayer to compute the value of supplies on actual basis.
vi. In the alternative to prayer clause (ii) supra., a writ of Mandamus or any
other order or direction reading down the impugned services Explanation
inserted vide Notification No.27/2018-Central Tax (Rate) dated 31.12.2018
3
appended to Sl.No.38 of Notification No.11/2017-Central Tax (Rate) dated
28.06.2017, and the corresponding notifications issued under the APGST Act
and IGST Act as being not mandatory and to that extent allowing taxpayer to
compute the value of supplies on actual basis. vii. A writ of mandamus or any
other order or direction to quash and set aside the impugned notice dated
19.12.2022, and the Impugned Order dated 11.07.2024 (that arises as a
consequence to the impugned notice), issued to the Petitioner and quash the
same as illegal, arbitrary, without jurisdiction and unconstitutional. viii. Costs
of the petition ix. Any other order which this Honble Court may deem fit in the
interest of justice, enquity and good conscience. Prayer is amended as per
the Court Order dt.24.09.2025 vide Orders passed in IA No.2 of 2025.
IA NO: 1 OF 2023
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
pleased to grant interim relief in the form of a direction to the Respondent No.
2 refrain from adjudication of the impugned notice dated 19.12.2022 as also
from initiating any precipitative action pursuant to the impugned notice dated
19.12.2022 or pass
IA NO: 1 OF 2024
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
pleased to extend interim orders dated 15 March 2023 in W.P No. 4725 of
2023, which was further extended by Order dated 04 October 2023 and list
the W.P No. 4725 of 2023 for final hearing expeditiously and pass
IA 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
Pleased to permit the Petitioner to amend the Main Prayer clause: Old Prayer
“/. A writ of Mandamus or any other order or direction to declare the
impugned Explanation inserted vide Notification No. 24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to SI. No. 234 of Notification No. 1/2017 –
Central Tax (Rate) dated 28.06.20 I 7, and the corresponding notifications
issued under the APGST Act and IGST Act, as being manifestly arbitrary and
violative of Article 14, Article 19(1)(g) and Article 265 of Constitution of India,
1950; a. A writ of Mandamus or any other order or direction to declare the
impugned Services Explanation inserted vide Notification No. 27/2018-
Central Tax (Rate) dated 31.12.2018 appended to SL No. 38 of Notification
4
No. 11/2017-Central Tax (Rate) dated 28.06.2017, and the corresponding
notifications issued under the APGST Act and IGST Act, as being manifestly
arbitrary and violative of Article 14, Article 19(1)(g) and Article 265 of
Constitution of India. 1950; Hi. A writ of Mandamus or any other order or
direction to declare Section 16(2)(c) of the CGST Act and the corresponding
Section 16(2)(c) of the APGST Act, as being arbitrary and violative of Article
14 and Article 19(1 )(g) of Constitution of India. 1950 since the same imposes
an unreasonable condition which is impossible to be performed by the
Petitioner; iv. A writ of Mandamus or any other order or direction to declare
the impugned Circular as being arbitrary and violative of Article 14 and Article
19(1)(g) of Constitution of India, 1950 since the same seeks to create
substantive disabilities on a retrospective basis not contemplated under the
CGST Act; i/. In the alternative to prayer clause (i) supra., a writ of Mandamus
or any other order or direction reading down the impugned Explanation
inserted vide Notification No. 24/2018 – Central Tax (Rate) dated 31.12.2018
appended to SI. No. 234 of Notification No. 1/201 7 – Central Tax (Rate)
dated 28.06.2017, and the corresponding notifications issued under the
APGST Act and IGST Act, as being not mandatory and to that extent allowing
taxpayer to compute the value of supplies on actual basis; vi. In the
alternative to prayer clause (ii) supra., a writ of Mandamus or any other order
or direction reading down the impugned Services Explanation inserted vide
Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018 appended to
SI. No. 38 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017,
and the corresponding notifications issued under the APGST Act and I GST
Act, as being not mandatory and to that extent allowing taxpayer to compute
the value of supplies on actual basis; vii. A writ of Mandamus or any other
order or direction to quash and set aside the impugned notice dated
19.12.2022 issued to the Petitioner being and quash the same as illegal,
arbitrary, without jurisdiction and unconstitutional; via. Costs of the petition;
ix. Any other order which this Hon’ble Court may deem fit in the interest of
Justice, equity and good conscience.” to the new prayer which reads as
follows: “/. A writ of Mandamus or any other order or direction to declare the
impugned Explanation inserted vide Notification No. 24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to SI. No. 234 of Notification No. 1/2017 –
Central Tax (Rate) dated 28.06.20 I 1, and the corresponding notifications
issued under the APGST Act and IGST Act, as being manifestly arbitrary and
violative of Article 14, Article 19(1)(g) and Article 265 of Constitution of India,
1950; a. A writ of Mandamus or any other order or direction to declare the
impugned Services Explanation inserted vide Notification No. 27/2018-
Central Tax (Rate) dated 31.12.2018 appended to SL No. 38 of Notification
5
No. 11/2017-Central Tax (Rate) dated 28.06.2017, and the corresponding
notifications issued under the APGST Act and IGST Act, as being manifestly
arbitrary and violative of Article 14, Article 19(1)(g) and Article 265 of
Constitution of India. 1950; i. A writ of Mandamus or any other order or
direction to declare Section 16(2)(c) of the CGST Act and the corresponding
Section 16(2)(c) of the APGST Act, as being arbitrary and violative of Article
14 and Article 19(1 )(g) of Constitution of India. 1950 since the same imposes
an unreasonable condition which is impossible to be performed by the
Petitioner; iv. A writ of Mandamus or any other order or direction to declare
the impugned Circular as being arbitrary and violative of Article 14 and Article
19(1)(g) of Constitution of India, 1950 since the same seeks to create
substantive disabilities on a retrospective basis not contemplated under the
CGST Act; V. In the alternative to prayer clause (i) supra., a writ of
Mandamus or any other order or direction reading down the impugned
Explanation inserted vide Notification No. 24/2018 – Central Tax (Rate) dated
31.12.2018 appended to SI. No. 234 of Notification No. 1/201 7 – Central Tax
(Rate) dated 28.06.2017, and the corresponding notifications issued under
the APGST Act and IGST Act, as being not mandatory and to that extent
allowing taxpayer to compute the value of supplies on actual basis; vi. In the
alternative to prayer clause (ii) supra., a writ of Mandamus or any other order
or direction reading down the impugned Services Explanation inserted vide
Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018 appended to
SI. No. 38 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017,
and the corresponding notifications issued under the APGST Act and IGST
Act, as being not mandatory and to that extent allowing taxpayer to compute
the value of supplies on actual basis; vii. A writ of Mandamus or any other
order or direction to quash and set aside the impugned notice dated
19.12.2022, and the Impugned Order dated 11.07.2024 (that arises as a
consequence to the impugned notice), issued to the Petitioner and quash the
same as illegal, arbitrary, without jurisdiction and unconstitutional; via. Costs
of the petition; ix. Any other order.
IA NO: 2 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
pleased to amend the old prayer which reads as follows A writ of Mandamus
or any other order or direction to declare the impugned Explanation inserted
vide Notification No. 24/2018 – Central Tax (Rate) dated 31.12.2018
appended to SI. No. 234 of Notification No. 1/2017 – Central Tax (Rate) dated
28.06.20 I 7, and the corresponding notifications issued under the APGST Act
6
and IGST Act, as being manifestly arbitrary and violative of Article 14, Article
19(1)(g) and Article 265 of Constitution of India, 1950; 3 A writ of Mandamus
or any other order or direction to declare the impugned Services Explanation
inserted vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018
appended to SL No. 38 of Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017, and the corresponding notifications issued under the APGST Act
and I GST Act, as being manifestly arbitrary and violative of Article 14, Article
19(1)(g) and Article 265 of Constitution of India. 1950; Hi. A writ of Mandamus
or any other order or direction to declare Section 16(2)(c) of the CGST Act
and the corresponding Section 16(2)(c) of the APGST Act, as being arbitrary
and violative of Article 14 and Article 19(1 )(g) of Constitution of India. 1950
since the same imposes an unreasonable condition which is impossible to be
performed by the Petitioner; iv. A writ of Mandamus or any other order or
direction to declare the Impugned Circular as being arbitrary and violative of
Article 14 and Article 19(1)(g) of Constitution of India, 1950 since the same
seeks to create substantive disabilities on a retrospective basis not
contemplated under the CGST Act; V. In the alternative to prayer clause (i)
supra., a writ of Mandamus or any other order or direction reading down the
impugned Explanation inserted vide Notification No. 24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to SI. No. 234 of Notification No. 1/201 7 –
Central Tax (Rate) dated 28.06.2017, and the corresponding notifications
issued under the APGST Act and IGST Act, as being not mandatory and to
that extent allowing taxpayer to compute the value of supplies on actual
basis; vi. In the alternative to prayer clause (li) supra., a writ of Mandamus or
any other order or direction reading down the impugned Services Explanation
inserted vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018
appended to SI. No. 38 of Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017, and the corresponding notifications issued under the APGST Act
and IGST Act, as being not mandatory and to that extent allowing taxpayer to
compute the value of supplies on actual basis; vii. A writ of Mandamus or any
other order or direction to quash and set aside the impugned notice dated
19.12.2022 issued to the Petitioner being and quash the same as illegal,
arbitrary, without jurisdiction and unconstitutional; via. Costs of the petition;
ix. Any other order which this Hon’ble Court may deem fit in the interest of
justice, equity and good conscience. r’ to this New prayer which reads as
follows: i. A writ of Mandamus or any other order or direction to declare the
impugned Explanation inserted vide Notification No. 24/2018 – Central Tax
(Rate) dated 31.12.2018 appended to SI. No. 234 of Notification No. 1/2017 –
Central Tax (Rate) dated 28.06.20 I 7, and the corresponding notifications
issued under the APGST Act and IGST Act, as being manifestly arbitrary and
7
violative of Article 14, Article 19(1)(g) and Article 265 of Constitution of India,
1950; a. A writ of Mandamus or any other order or direction to declare the
impugned Services Explanation inserted vide Notification No. 27/2018-
Central Tax (Rate) dated 31.12.2018 appended to SL No. 38 of Notification
No. 11/2017-Central Tax (Rate) dated 28.06.2017, and the corresponding
notifications issued under the APGST Act and IGST Act, as being manifestly
arbitrary and violative of Article 14, Article 19(1)(g) and Article 265 of
Constitution of India. 1950; Hi. A writ of Mandamus or any other order or
direction to declare Section 16(2)(c) of the CGST Act and the corresponding
Section 16(2)(c) of the APGST Act, as being arbitrary and violative of Article
14 and Article 19(1 )(g) of Constitution of India. 1950 since the same imposes
an unreasonable condition which Is impossible to be performed by the
Petitioner; iv. A writ of Mandamus or any other order or direction to declare
the impugned Circular as being arbitrary and violative of Article 14 and
Article 19(1)(g) of Constitution of India, 1950 since the same seeks to create
substantive disabilities on a retrospective basis not contemplated under the
COST Act; V. In the alternative to prayer clause (i) supra., a writ of
Mandamus or any other order or direction reading down the impugned
Explanation inserted vide Notification No. 24/2018 – Central Tax (Rate) dated
31.12.2018 appended to SI. No. 234 of Notification No. 1/201 7 – Central Tax
(Rate) dated 28.06.2017, and the corresponding notifications issued under
the APGST Act and IGST Act, as being not mandatory and to that extent
allowing taxpayer to compute the value of supplies on actual basis; vi. In the
alternative to prayer clause (ii) supra., a writ of Mandamus or any other order
or direction reading down the impugned Services Explanation inserted vide
Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018 appended to
SI. No. 38 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017,
and the corresponding notifications issued under the APGST Act and IGST >
Act, as being not mandatory and to that extent allowing taxpayer to compute
the value of supplies on actual basis; vii. A writ of Mandamus or any other
order or direction to quash and set aside the impugned notice dated
19.12.2022, and the Impugned Order dated 11.07.2024 (that arises as a
consequence to the impugned notice), issued to the Petitioner and quash the
same as illegal, arbitrary, without jurisdiction and unconstitutional; via. Costs
of the petition; ix. Any other order which this Hon’ble Court may deem fit in
the interest of justice, equity and good conscience and pass
IA NO: 3 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
8
pleased to amend the Writ Petition by adding additional Ground K to the writ
petition affidavit and pass
IA NO: 4 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
pleased to amend the writ petition affidavit by adding Paras 48(a) to 48(d) to
the writ petition and pass
IA NO: 5 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
pleased to receive the counter copies on record by allowing the leave petition
in the above writ petition and pass
Counsel for the Petitioner:
1. SAI SUNDEEP MANCHIKALAPUDI
Counsel for the Respondent(S):
1. DEPUTY SOLICITOR GENERAL OF INDIA
2. SURESH KUMAR ROUTHU (SR SC FOR CBIC)
3. GP FOR COMMERCIAL TAX
9The Court made the following order:
(per Hon‟ble Sri Justice R. RaghunandanRao)
Heard Sri Avinash Desai, Sri Rishab Prasad learned counsel appearing
for the petitioner, the learned Deputy Solicitor General of India, Sri Suresh
Kumar Routhu and the learned Government Pleader for Commercial Taxes,
appearing for the respondents.
2. The petitioner is in the business of manufacturing and installing
Solar Panels and Solar Power Generating Systems. The 2nd respondent
initiated proceedings for assessing turnover of the petitioner for the period
from March, 2018 to April, 2019. At that stage, the petitioner had approached
this Court, by way of this Writ Petition, contending that the 2nd respondent
lacked jurisdiction. During the pendency of the Writ Petition, the 2nd
respondent passed an order of assessment, dated 11.07.2024. The petitioner
had thereupon amended the prayer in the Writ Petition to include a challenge
to the order, dated 11.07.2024.
3. The 2nd respondent sought to tax the petitioner, at the rate of 5%
for 70% of the turnover and at the rate of 18% for 30% of the turnover, based
upon the explanation added to Notification No.24/18 with effect from
01.01.2019. The petitioner sought to dispute the proposed levy on the ground
that the supply of goods and services made by the petitioner in the process of
selling Solar Panels or Installing Solar Power Generating Systems has always
been composite supply of services and goods, as defined under Section 2(30)
10of the GST Act, and that such supply should be taxed, in accordance with the
provisions of Section 8 of the GST Act.
4. The 2nd respondent took the stand that even in case of such
composite supplies, the explanation added to Sl. No.234 of Notification No.1
of 2017, introduced a legal fiction, whereby the value of the supply was to be
deemed as supply of goods to the extent of 70% of the consideration and
supply of services for the remaining 30% of the consideration.
5. The GST Act does not provide for any rate of tax on the supply of
goods or services. The said rate of tax is stipulated under various notifications,
issued under the GST Act. One of the first notifications issued for fixing rate of
tax, on supply of goods, has been Notification No.1/2017-Central Tax (Rate),
dated 28.06.2017. In this notification, Sl.No.234 provided for a rate of tax on
non-conventional power systems. The said entry reads as follows:
234. Following renewable energy devices & parts for their manufacture
(a) Bio-gas plant
(b) Solar power based devices
(c) Solar power generating system
(d) Wind mills, Wind Operated Electricity Generator (WOEG)
(e) Waste to energy plants/devices
(f) Solar lantern/solar lamp
(9) Ocean waves/tidal waves energy devices/plants
25(h) Photo voltaic cells, whether or not assembled in modules or made
up into panels]
11321 [Explanation: If the goods specified in this entry are supplied, by a
supplier, along with supplies of other goods and services, one of which
being a taxable service specified in the entry at S. No. 38 of the Table
mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28th
June, 2017 (G.S.R. 690(E)], the value of supply of goods for the
purposes of this entry shall be deemed as seventy per cent. of the gross
consideration charged for all such supplies, and the remaining thirty per
cent. of the gross consideration charged shall be deemed as value of
the said taxable service.]”
6. In the case of works contracts, resulting in formation of an
immovable property, the rate of tax was fixed at 18%.
7. Various manufacturers and suppliers of solar equipment,
including solar power generating systems, contended that the supplies made
by them of solar power generating systems or any of the goods mentioned in
Sl.No.234, would have to be treated as „supply of movable property‟, and that
the rate of tax payable by such suppliers would be 5% on the supply of
services and goods in view of Section 8 of the GST Act, which stipulates that
the rate of tax in the case of a composite supply of services and goods, would
have to be the rate applicable to the majority of the turnover.
8. This Court, by an order, dated 10.01.2025, in W.P.No.20096 of
2020 in the case of Sterling & Wilson Private Limited Bs. Joint
Commissioner & Ors.,1 M/s. Siemens Gamesa Renewable Power Private
Limited vs. The Assistant Commissioner ST Kavali Circle, Nellore
1
2025 SCC Online AP 63 : (2025) 140 GSTR 383
12
Division and Ors, Kavali Circle, Nellore dated 03.12.2025,
2025:APHC:56076 and M/s. Arka Green Power Private Limited vs. The
State of Andhra Pradesh, dated 24.12.2025, 2025:APHC:59797 had held
that the installation of a solar power generating system, would be a composite
supply of movable goods and services. On the basis of such finding, this Court
had held that the rate of tax applicable for such supplies would be 5%, as
stipulated in Sl.No.234 of Notification No.1 of 2017.
9. In a parallel development, a large number of suppliers of goods
mentioned in Sl.No.234, has approached the State for relief, inasmuch as the
tax component was placing a burden on the suppliers. The GST Council, after
considering the said representation had inserted an explanation to Sl.No.234,
by way of Notification No.24 of 2018. The said explanation reads as follows:
“Explanation: If the goods specified in this entry are supplied, by
a supplier, along with supplies of other goods and services, one
of which being a taxable service specified in the entry at S. No.
38 of the Table mentioned in the notification No. 11/2017-Central
Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of
supply of goods for the purposes of this entry shall be deemed as
seventy per cent. of the gross consideration charged for all such
supplies, and the remaining thirty per cent. of the gross
consideration charged shall be deemed as value of the said
taxable service.”
10. In the present case, the petitioner contended that, the supplies
made by the petitioner should be treated as a composite supply which should
be taxed at 5%. While considering this objection, the 2nd respondent took the
view that the Explanation to Sl.No.234 had created a legal fiction, on account
of which even composite supplies should be taxed at the rate of 5% for 70% of
13
the value of supply and 18% for 30% of the value of supply. This view was
contested by the petitioner on two grounds. Firstly, no such legal fiction arises
inasmuch as the explanation was only added to aid the suppliers of the goods
mentioned in Sl.No.234, and the same cannot be treated as a mandatory
provision which would straitjacket suppliers into paying a tax which was not
payable. The petitioner had also raised a second objection, that the said
explanation even if applicable, would be applicable only from 01.01.2019 and
the major part of the turnover of the petitioner relates to a period prior to
01.01.2019.
11. The 2nd respondent rejected both these contentions and held that
a subsequent Circular No.163/19/2021-GST, dated 06.10.2021, had clarified
that the explanation can be extended prior to 01.01.2019.
12. A reading of Circular No. 163/19/2021-GST dated 06.10.2021
would show that the said circular only extended the applicability of the
explanation at the option of the tax payer, and not as an absolute
retrospective application of the explanation, which was brought into effect from
01.01.2019.
13. It is clear from the order of assessment, that the 2nd respondent
has not gone into the question of whether the supplies made by the petitioner
had resulted in immovable property coming into existence, or whether the
supply was for the installation of movable goods due to which the provisions of
Section 8 read with the rate of tax stipulated under Sl.No.234 of Notification
14
No.1 of 2017, would be applicable. It is also clear that the 2nd respondent has
not gone into the question as to the turnover of the petitioner which had
occurred before 01.01.2019. As already held above, the view of the 2nd
respondent, that the Circular No. 163/19/2021-GST, dated 06.10.2021 would
give retrospective effect to the explanation is incorrect.
14. For all the aforesaid reasons, it would be appropriate that the
present order of assessment, dated 11.07.2024, is set aside and the matter is
remanded back to the 2nd respondent for passing a fresh order of assessment,
after going in to the question of whether the supplies made by the petitioner
are works contracts resulting in immovable property, or whether supplies of
goods and services in relation to movable property. The 2nd respondent would
also have to go into the question of whether the explanation, added in
Sl.No.234 of Notification No.1 of 2017, is a mandatory deeming fiction which
results in higher taxation on the petitioner. Needless to say, the question of
whether the explanation, added by Notification No.24/2018, is ultra vires
Section 8 of the GST Act is left open for future consideration.
15. Accordingly, this Writ Petition is disposed of. There shall be no
order as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
_______________________________
R. RAGHUNANDAN RAO, J
____________________
T.C.D. SEKHAR, J
RJS
15
THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
&
THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
WRIT PETITION No: 4725 of 2023
(per Hon‟ble Sri Justice R.Raghunandan Rao)
15.04.2026
RJS