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582 GST LAW TIMES [ Vol. 34
was liable to GST under Sl. No. 17(iii) - Heading 9973 of Notification No.
11/2017-Central Tax (Rate), dated 28-6-2017. As a consequence of the said Rul-
ing, the supply of reagents, calibrators, disposables etc., which is otherwise taxa-
ble @ 5% [2.5% CGST + 2.5% SGST], became taxable at the rate of tax applicable
to the instruments, namely, 18% [9% CGST + 9% SGST].
3. Aggrieved by the said order of the AAR, the petitioner preferred an
appeal before the Appellate Authority, the 6th respondent in the writ petition.
The said appeal, however, was rejected by the 6th respondent, who confirmed
the order of the AAR, by Ext. P1 order [2019 (23) G.S.T.L. 49 (App. G.S.T.L. -
GST)]. In the writ petition, Exts. P1 and P2 orders are impugned inter alia on the
contention that, while the 5th and 6th respondents erred in rendering a finding
as regards composite supply, when the said query was not raised before them for
clarification, the said finding itself was illegal and against the provisions of the
CGST/SGST Act.
4. Appearing for the petitioner, the Learned Senior Counsel Sri. V. Sri-
dharan assisted by Adv. Sri. Shaji Thomas, would contend as follows :
• The 5th and 6th respondents decided an issue that was not referred
to them for their ruling. The said respondents therefore acted with-
out jurisdiction in rendering their findings on the issue relating to
composite supply.
• The finding that the supplies effected by the petitioner constituted a
composite supply of medical equipments together with reagents,
calibrators and disposables, is a perverse one because it is not based
on any material and is purely based on a presumption and supposi-
tion divorced from reality.
• The supply effected by the petitioner is of an instrument which is
independent and distinct from the supply of reagents, calibrators
and disposables by the distributor, and hence, the two supplies
have to be treated as independent, and not as a composite supply.
• At any rate, the supply of the instrument cannot be seen as the prin-
cipal supply in a deemed composite supply, since the value of the
instrument supplied during the contract period constitute only
about 20% of the value of the reagents/calibrators/disposables
supplied during the same contract period.
5. Per contra, the Learned Government Pleader Smt. Thushara James
would respond to the submission of the Learned Senior Counsel for the petition-
er as follows :
• To answer the issue raised by the petitioner, the AAR had to look at
the supply effected by the petitioner in the backdrop of the contrac-
tual terms under which the supply was effected. When so viewed, it
is apparent that the instrument supplied by the petitioner cannot
function without the reagent/calibrator/disposables supplied by
the distributor of the petitioner. It followed therefore that the func-
tioning of the instrument was dependant on the reagents/calibra-
tors/disposables supplied by the distributor, and hence, the sup-
plies effected by both persons had to be clubbed to ascertain the real
“supply” that was effected by the petitioner.
• When both the supplies are taken together as envisaged under the
contract entered into between the parties, then the supply effected
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