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TMI Blog2022 (9) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as the 'WBAAR'). 2. The appeal petition was admitted in the light of the order passed by the Apex Court dated 10.01.2022 in the matter of 'Cognizance for extension of Limitation' in the matter of Misc. app. No. 665 of 2021 & 21 of 2022 and Suo Motu Writ Petition (C) no. 3 of 2020. 3. The Appellant holding GSTIN 19AAMFM0708M1ZX is a flour miller and stated to be engaged in the business of providing services of job work by crushing food grains supplied by the Food & Supplies Department, Government of West Bengal. The Food & Supplies Department supplies wheat to the appellant who crushes the grain to obtain the final product 'atta' (flour) which is fortified with micronutrients and then packed in labeled poly-packs as per spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crushing 100 kg wheat (2 gunny bags full): (i) Crushing Charges: 90.78 (ii) Add fortification cost: 10.00 (iii) Add packing charges: 50.00 (iv) Add Transportation & handling charges: 28.70 (v) Add consideration from sale of bran: 80.00 (vi) Add consideration from sale of refractor: 1.00 Total value of supply [(i) to (vi)]: 260.48 ------- (A) (vii) Consideration from sale of gunny bags: 43.00 (viii) Add consideration from sale of bran: 80.00 (ix) Add consideration from sale of refractor: 1.00 Total non-cash consideration (vii) to (ix): 124.00 -------- (B) Total cash consideration (A) - (B): 136.48-------- (C) [Food & Supplies Department fixed notional consideration from sale of gunny bag @ 21.50 per bag, sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a Municipality under article 243W of the Constitution; (iii) The value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply. The WBAAR observed that the instant composite supply undisputedly fulfils criteria (i) and (ii) above. So the moot question is to decide whether the value of goods supplied in the said composite supply is not more than 25% of value of total supply. The goods supplied to the Food & Supplies Department in the composite supply are micronutrients like iron, folic acid, vitamins etc. and for this Rs.10/- is received from the Government for fortifying atta obtained by crushing 100 kg wheat. Further the miller supplies the packing material as per specifications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by WBAAR is vague and inadequate; b) The WBAAR erred in its conclusion that valuation could not be done in absence of documentary evidence substantiating the sale proceeds from sale of gunny bags, bran and refractor. The Appellant submits that the valuation of non-cash consideration is not dependent of actual proceeds from sale of gunny bags, bran and refractor in the open market; c) The Appellant submits that in the instant case there are three sets of supply involved as under: (i) Composite supply of crushing 100 kg wheat and supplying fortified wholemeal 'atta' to Food & Supplies Department, Government of West Bengal where consideration is received in both cash and non-cash and the total supply value is Rs.260.48. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant's authorised advocate reiterated the points as stated in the Grounds of Appeal. He emphasized on the point that non-cash consideration as fixed by the Food & Supplies Department, Government of West Bengal needs to be taken for valuation of composite supply of milling services at Rs.260.48 against every 100 kg wheat and not dependent on the actual consideration received from the open market from disposal of gunny bags, bran and refractor. He also argued that it was established before the WBAAR that the non-cash consideration will be a part of total consideration of the composite supply and which was also accepted by the WBAAR as observed from the order dated 31.12.2022. In this connection the Appellant's authorised advocate submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 31.12.2021 that the total value of composite supply will comprise both cash and non-cash considerations. The WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran. It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran. The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food & Supplies Department. This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 5 kg bran) which are retained by the miller, irrespective of actual disposal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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