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2021 (1) TMI 175 - ANDHRA PRADESH HIGH COURTJob Work - Consideration for Levy of GST - value of broken rice, bran and husk obtained by the petitioner on milling of the paddy of the respondent No. 4 - milling charges - compensation/exchange for the own rice supplied by the petitioner to the respondent No. 4 to make up the shortfall in the yield - by-products were left to the petitioner as compensation to replenish the shortfall of the rice to make 67% of yield on milling - According to Revenue, not only the milling charges @ ₹ 15/-per quintal but also the by-products received by the petitioner constitute the consideration, whereas, the contention of the petitioner is that by-products were just left by 4th respondent with the petitioner as they were not useful to it, for, their disposal was not economically viable. HELD THAT:- It is pertinent to mention here that in similar circumstances, in the case of FOOD CORPORATION OF INDIA VERSUS STATE OF AP [1997 (4) TMI 483 - ANDHRA PRADESH HIGH COURT], a Division Bench of the High Court of Andhra Pradesh held that when the terms between the parties are under an agreement, those terms are sacrosanct and cannot be explained otherwise by adducing oral evidence. The facts in that case briefly are that the FCI entered into agreements with different millers to whom it supplied paddy for the purpose of milling and paid hire charges and milling charges. As per the milling agreement, the FCI agreed to give the by-products such as broken rice, husk and bran to the millers. The Assessing Authority added the value of the by-products to the turnover of the FCI for the purpose of computation of Sales Tax, treating such by-products to have been sold by the FCI to the millers. The contention of the FCI was that it just allowed the millers to treat the by-products as their property but there was no sale between them and it did not receive any remuneration in that regard and therefore same cannot be added to its turnover - The Division Bench observed There is nothing to show that the transfer of property in the goods or the by-products to be by way of sale, but only indicates that the FCI does not concern or bother itself for the broken rice, etc., for which it has no use and does not want to be burdened with the clause would not lead to the proof of there having been a sale. The transfer of property in the goods might take place even when there is no sale, say where there is a voluntary transfer or gifting away of the goods in question. In the case on hand, the Assessment Order was passed 29-10-2018 and as per Section 107 of GST Act, an appeal shall be filed within three (3) months from the date of communication of the order. The Writ petition is filed on 17-12-2018 i.e., well within the period of limitation for filing appeal. Having regard to the dictum laid in Glaxo Smith's case (2 supra), this Court can either entertain the writ petition or refer the petitioner to Appellate authority. Since the impugned order was passed having no regard to the law laid down in the case of Food Corporation of India v. State of A.P, the writ was entertained. The objection raised by learned counsel for the 4th respondent that in view of the arbitration clause, the writ petition is not maintainable, has no teeth. It should be noted that there are no disputes between the petitioner and the 4th respondent with regard to the implementation of the terms of the agreement. On the other hand, the dispute is between the Revenue and the petitioner as to whether or not the by-products form part of the consideration. Since such a dispute cannot be referred to and resolved by the Arbitrator, the Writ Petition is very much maintainable. The impugned Assessment Order passed by the 1st respondent in so far as it relates to the 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 milling of the paddy, is set aside - Petition allowed.
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