APHC010180672022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3529] WEDNESDAY, THE TWENTY FOURTH DAY OF DECEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION Nos.11989, 12770, 12773 & 12822 of 2022 WRIT PETITION NO: 11989/2022 Between: 1. M/S ARKA GREEN POWER PRIVATE LIMITED, REP. BY ITS DIRECTOR, MNV. SATYA GOPINATH, S/O. PANDURANGA RAO, AGED 43 YEARS, OCC. BUSINESS, R/O. RAMALAYAM STREET, MYLAVARAM, KRISHNA DISTRICT. ...PETITIONER AND 1. THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL SECRETARY, DEPT. OF COMMERCIAL TAXES, SECRETARIAT, AMARAVATI. 2. THE APPELLATE AUTHORITY CUM JOINT COMMISSIONER OF STATE TAX, VIJAYAWADA, KRISHNA DISTRICT. 3. THE ASST COMMISSIONER STATE TAX, IBRAHIMPATNAM CIRCLE, VIJAYAWADA-I DIV., KRISHNA DISTRICT. 4. THE EXECUTIVE DIRECTOR PROJECTS, THE SOUTHERN POWER DISTRIBUTION COMPANY OF A.P. LTD. (APSPDCL), TIRUPATI. 5. THE EXECUTIVE DIRECTOR PROJECTS, THE EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. (APEPDCL), VISAKHAPATNAM. 2 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch 6. THE NEW AND RENEWABLE ENERGY DEVELOPMENTCORPORATION OF ANDHRA PRADESH LIMITED NREDCAP, REP. BY ITS MANAGING DIRECTOR, 12-464/5/1, TADEPALLI, GUNTUR DISTRICT-522 501. ...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 toto issue writ, order or direction, more particularity one in the nature of writ of Mandamus by declaring the Impugned CTD Order No. GSTN Ref. No. ZD370322006943K Dt. 31.03.2022 for the Central tax period April- 2018 to December'2018 passed by the 2nd Respondent to pa Rs. 28,17,923/- (towards Tax plus Penalty plus Interest) is being illegal, arbitrary and violative of Articles 14 and 21 of the Constitution of India and set aside the same by directing the 4 to 6 Respondents to pay difference of amount of Tax to the GST Department on behalf of the petitioner in pursuance of the clause 3 of the Tri-Partite Agreement Dt.12.03.2018 and pass IA NO: 1 OF 2022 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 stay of all further proceedings in pursuance of the Impugned CTD Order No. GSTN Ref. No. ZD370322006943K Dt. 31.03.2022 for the Central tax period April'2018 to December'2018 passed by the 2nd Respondent to pay Rs. 28,17,923/- (towards Tax+ Penalty + Interest) pending disposal of the writ petition in the interest of justice. IA NO: 2 OF 2022 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 be to vacate the interim orders granted on dated: 05.05.2022 in IA No.1 of 2022 in W.P.No. 1 1989 of 2022 in the interests of justice and to pass Counsel for the Petitioner: 1. THANJAVURU VENKATA SUMAN Counsel for the Respondent(S): 1. ALAPATI VIVEKANANDA (SC FOR NREDCAP) 3 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch 2. V V SATISH (SC for APEPDCL) 3. GP FOR COMMERCIAL TAX 4 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch The Court made the following Common Order: (per Hon‟ble Sri Justice R. Raghunandan Rao) As these four (04) Writ Petitions are filed by the same registered person and relate to the same issue, they are being disposed of, by way of this common order. 2. In all these cases, the petitioner which is in the business of supply of Solar Power Devices, including solar power pumping systems, had entered into a Memorandum of Understanding with the 6th respondent - New and Renewable Energy Development Corporation of Andhra Pradesh Limited, for the purpose of supplying solar power pumping systems to farmers. Under the said Memorandum of Understanding, the petitioner had supplied such solar power pumping systems, during the period July-2017 to December-2018. The Assessing Authority, while dealing with the rate of tax payable on supply of such solar pumping systems, had held that, the said transaction would have to be treated as works contracts and levied G.S.T. @ 18%. Thereafter, in view of the subsequent circulars and clarifications, tax was levied on the petitioner @ 5% for 70% of the turnover and 18% for remaining 30% of the turnover. The Orders of the Assessing Authority are challenged by way of Appeals. The said Appeals, came to be disposed of, by an order, dated 31.03.2022, wherein the assessment orders were modified for reducing the penalty as well as for reducing the dues in line with the circulars issued for reduced rate of tax. 5 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch 3. The petitioner had thereupon, approached this Court, by way of the present set of Writ Petitions. The details of the assessment orders, appellate orders as well as the Writ Petitions are set out in the table given below: Sl.No. Writ Petition No. Orders issued by CGST/SGST Tax Period Demanded amount by Primary Authority Demanded amount by Appellate Authority 1. 11989 of 2022 CGST April 2018 to December 2018 Rs.53,15,142/- Rs.28,17,923/- 2. 12770 of 2022 SGST July 2017 to March 2018 Rs.58,18,524/- Rs.32,65,385/- 3. 12773 of 2022 SGST April 2018 to December 2018 Rs.53,15,142/- Rs.28,17,923/- 4. 12822 of 2022 CGST July 2017 to March 2018 Rs.58,18,524/- Rs.32,65,385/- 4. The petitioner contends that the respondent authorities, had forcibly recovered tax @ 5% for 70% of the turnover and 18% for remaining 30% of the turnover, aggregating to 8.9% of the total turnover by recovering the same from the Power Distribution Companies, which are respondents 4 & 5 herein. 5. The main contention of the petitioner herein is that, the supply of solar power pumping systems should be treated as falling within entry No.234 of Notification No.11 of 2017, dated 28.06.2017. The respondent authorities, on 6 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch the other hand, contend that, the supply of solar power pumping systems do not fall within the said entry and should only to be treated as works contracts of installing immovable property attracting 5% for 70% of the turnover and 18% for remaining 30% of the turnover. 6. The description of the systems supplied by the petitioner is given in the order of the Assessing Authority in the following terms: “Thus, it is clear that the supplies made by the Tax Payer are Solar Power Pump Irrigation System covering the Design, Erection, Installation, Repairs & Comprehensive Maintenance contract for a period of 5(five) years also Insurance for the supply and the said system is installed on civil foundation with mounting structure permanently embedded to Earth and Solar Power Voltaic Modules are attached to the said embedded mounting structure and other instruments/Machinery such as VFD, Inverter are also attached to this system and benefit/output is Power which is used for running the motor system which comprises Open Well Motor/Submersible Motor/Cable, HDPE Pipe etc., . In whole, Solar Power Irrigation System supplied by the Tax Payer is the Immovable property which are embedded to Earth/attached to the things embedded to Earth and for the purpose of getting Solar Power and the same is used for benefit of the Farmer for the period of 5(five) years of CMC period and there after also the Farmer get the benefit of Water from the Bore well/Open Well for irrigation purpose and the such system shall not be shifted to any other place occasionally or frequently. Therefore, the activity of the Tax Payer is the “Supply of Works Contract Service” which is clearly comes under the definition of “2(119) of CGST/SGST Act 2017 and the Supply is clearly comes under the Works Contract Service and hence it cannot fit into any other Entry such as exclusive Supply of Goods. Hence the Supply of Works Contract Service of Solar Pump Irrigation System attracts the Tax @9% SGST/9% CGST/18% IGST as the case may be.” 7. This Court had dealt with a similar situation, in its judgment, dated 10.01.2025, in W.P.No.20096 of 2020, in the case of Sterling & Wilson Private Limited Vs. Joint Commissioner & Ors.1 in the following manner: 1 2025 SCC Online AP 63 : (2025) 140 GSTR 383 7 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch “32. The description of the Solar Power Generating System, set out by the petitioner, is not disputed by the appellate authority. However, the appellate authority went on to hold that the Solar Power Generating System would be immoveable property on the following grounds, which can be extracted from the passage from the order of the appellant authority, as set out above: 1. Though the power generating system is fitted with nuts and bolts on the mounting structure, it would be immoveable as the very mounting structure is embedded in the earth. 2. The solar modules are fixed with a character of permanence and immovability and cannot be treated as moveable property. 3. The fixation of the solar modules on the civil foundation is for the permanent beneficial and enjoyment of the land on which power plant is set up and the same satisfies the condition of property embedded in the earth. 33. The Hon„ble Supreme Court in Commissioner of Central Excise, Ahmedabad v. Solid and Correct Engineering Works, had set out the guidelines for deciding whether property would be moveable or immoveable. In the passage extracted above, the Hon„ble Supreme Court, after considering the provisions of the General Clauses Act, 1897 as well as the Transfer of Property Act, 1882, had held that things attached to the earth would be immoveable property. However, Section 3 of the Transfer of Property Act clarifies that this term would apply to trees and shrubs; buildings or goods embedded in the earth; and things, which are attached to what is embedded in the earth, for the permanent beneficial enjoyment of the structure embedded in the earth. 34. In the present case, the solar power plant is not trees or shrubs, which are rooted in earth or a structure embedded in the earth. The appellate authority also accepts that the solar power module is attached to the civil foundation, which is embedded in the earth. The property, which is attached to a structure embedded in the earth, would also become immoveable property only when such attachment is for the permanent beneficial enjoyment of the structure, which is embedded in the earth. In this case, the civil foundation is embedded in the earth. However, the solar modules and the Solar Power Generating System have not been attached to the civil structure for the purpose of better enjoyment or beneficial enjoyment of the civil foundation. On the contrary, the civil foundation has been embedded on earth for better permanent and beneficial enjoyment of the Solar Power Generating Station. 35. Applying the aforesaid test, it must be held that the property in question, viz., the Solar Power Generating System would not answer the description of immoveable property. The transaction in question would not fall within the meaning of “works contract” as defined under Section 2(119) of the GST Act. 8 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch 36. However, the appellate authority relied upon the judgment of the Hon„ble Supreme Court in Duncans Industries Limited vs. State of Uttar Pradesh and Ors., wherein the Hon„ble Supreme Court had taken the view that any property embedded in the earth with an intention of keeping the same embedded permanently, would have to be treated as immoveable property. This view was taken by the Hon„ble Supreme Court, on the finding of the High Court that the plant and machinery, in that case, was embedded in the earth. The Hon„ble Supreme Court also held that the earlier judgment in Sirpur Paper Mills Limited v. The Collector of Central Excise would not be applicable as the facts are different.” 8. In the present cases, the attachment of the pumping systems to a base, and their embedded role therein, does not make solar power pumping systems a part of immovable property. The judgment of this Court in the case of Sterling & Wilson Private Limited Vs. Joint Commissioner & Ors., would squarely apply to the present cases also. 9. In these circumstances, these Writ Petitions are allowed, following the judgment of this Court in the case of Sterling & Wilson Private Limited Vs. Joint Commissioner & Ors., setting aside the order of the 2nd respondent, dated 31.03.2022 in all the aforesaid cases and the order dated Nil.03.2022, in W.P.No.12773 of 2022 along with the orders of the 3rd respondent and the matters are remanded back to the 3rd respondent – Assessing Authority to redo the assessment by treating the supply of solar power pumping systems as a composite supply, attracting tax @ 5%. There shall be no order as to costs. 9 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch As a sequel, pending miscellaneous applications, if any, shall stand closed. ________________________ R. RAGHUNANDAN RAO, J _________________ T.C.D. SEKHAR, J Date:24.12.2025 KPV 10 RRR,J & TCDS,J W.P.No.11989 of 2022 & batch 181 THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HON'BLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION Nos.11989, 12770, 12773 & 12822 of 2022 (per Hon‟ble Sri Justice R. Raghunandan Rao) 24.12.2025 KPV