Writ Petition No. 23352 of 2023 · The High Court
Case Details
- 1 - NC: 2025:KHC:11842 WP No. 23352 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.23352 OF 2023 (T-RES) …PETITIONER BETWEEN: SHRI. A.H. MOHAN KUMAR S/O HONNEGOWDA AGED ABOUT 44 YEARS CLASS - I CONTRACTOR, R/A NO.460, APK EXTENSION, HOLENARASIPURA TALUK HASSAN DISTRICT – 573 211. (BY SRI. KRISHNA MURTHY M.S., ADVOCATE FOR SRI. HALESHA R.G., ADVOCATE) AND: 1. 2. 3. 4. THE STATE OF KARNATAKA FINANCE DEPARTMENT, II FLOOR, VIDHANA SOUDHA BENGALURU – 560 001. REPRESENTED BY ADDITIONAL CHIEF SECRETARY. THE UNION OF INDIA MINISTRY OF FINANCE NEW DELHI -110001 REPRESENTED BY ITS SECRETARY. THE GOODS AND SERVICES TAX COUNCIL JANPATH CONNAUGHT PLACE NEW DELHI -110 001 REPRESENTED BY SPECIAL SECRETARY. PRINCIPAL COMMISSIONER OF CENTRAL TAX NO.1, QUEEN’S ROAD, VASANTHNAGAR BENGALURU – 560 001.
Legal Reasoning
Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - NC: 2025:KHC:11842 WP No. 23352 of 2023 5. COMMISSIONER OF COMMERCIAL TAXS GOVERNMENT OF KARNATAKA VANIJYA THEREIGE KARYALAYA 1ST MAIN ROAD, GANDHINAGAR, BENGALURU – 560 009. 6. JOINT COMMISSIONER OF COMMERCIAL TAXES (ADMN) DIVISIONAL VAT, SHIVAMOGGA. 7. OFFICE OF PRINCIPAL COMMISSIONER GST & CENTRAL EXCISE MYSURU. 8. OFFICE OF THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) HASSAN. 9. THE COMMISSIONER, THE KARNATAKA SLUM DEVELOPMENT BOARD, BENGALURU. 10. THE DEPUTY CONSERVATOR OF FORESTS AND DIRECTOR RAJIV GANDHI NATIONAL PARK, HUNSUR. 11. THE EXECUTIVE ENGINEER HRBC DIVISION CNNL HOLENARASIPURA. 12. THE EXECUTIVE ENGINEER HEMAVATHI RIVER BANK GORURU. 13. THE EXECUTIVE ENGINEER HR DIVISION, KUSHALANAGARA KODAGU DISTRICT. …RESPONDENTS
Legal Reasoning
(BY SMT. JYOTHI M. MARADI, HCGP FOR R1 & R5 TO R13; SRI. SHANTHI BHUSHAN, DSGI FOR R2; SRI. JEEVAN J. NEERALGI, ADVOCATE FOR R3 & R4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF DIRECT TO THE THE CONSTITUTION OF INDIA PRAYING TO RESPONDENTS NO.9 TO 13 TO CONSIDER THE REPRESENTATION MADE ON 20/09/2023 BY THE PETITIONER TO THEM PRODUCED AT ANNEXURES – C1, C2, C3, C4 AND C5 AND DIRECT THEM TO RELEASE THE GST TAX AMOUNT AS STIPULATED BY THE GST ACT AND ETC. - 3 - NC: 2025:KHC:11842 WP No. 23352 of 2023 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs: “(a) Pleased to issue a writ, orders or direction to the Respondents No.9 to 13 to consider the Representation made on 20.09.2023 by the Petitioner to them produced at Annexrue-C1, C2, C3, C4 & C5 and direct them to release the GST Tax amount as stipulated by the GST Act. (b) Declare that the provisions of GST Act is inapplicable in respect of works contact where ‘provisions of service’ are made prior to 01.07.2017 in so far as petitioners are concerned and consequently that the respondent Nos.4 to 8 have no jurisdiction to either issue notice to take any coercive steps against the Petitioners under the provisions of the GST Act dated 01.07.2017 produced as Annexure-D2. (c) Declare that the provisions of Section 7(3) read with clause 6 of Schedule II of the GST Act is ultra-virus Article 366 12(A), (26A) (29A) (b) & (f) the Constitution in view of and settled principles of law laid down by the Hon’ble Supreme Court regarding “works contract” and consequently that the respondent Nos.4 to 8 have no jurisdiction to either issue notice or to take any coercive steps against the petitioners under the provisions of the GST Act for “works contract” entered into post 01.07.2017 i.e., after the GST Act came into effect which is produced as Annexure-D2. - 4 - NC: 2025:KHC:11842 WP No. 23352 of 2023 (d) Pass such other orders as may be deemed appropriate under the circumstances of the case, in the ends of justice.” 2. Heard learned counsel appearing for the petitioner, learned HCGP, DSGI and learned counsel for the respondents and perused the material on record. 3. Learned counsel appearing for the petitioner submits that the prayer that is sought is to be allowed in the light of the law laid down by this Court in the case of Sri.Chandrashekaraiah and others Vs. The State of Karnataka – W.P.No.9721/2019 and connected cases dated 11.04.2023, wherein it is held as under:
Decision
"20. In the result, I pass the following:- ORDER (i) Petitions are hereby disposed of. (ii) The Respondents-State and other Govt agencies / Respondents who have entered into works contract with the Petitioners are issued the following directions / guidelines:- (a) Calculate the works executed pre- GST (prior to 01.07.2017) under KVAT regime and payments received by the Petitioners. - 5 - NC: 2025:KHC:11842 WP No. 23352 of 2023 (b) The payments received by the Petitioners pre-GST for such of the works executed before 01.07.2017 are to be assessed under KVAT tax regime – either under COT or VAT scheme as applicable. (c) Calculate the balance works to be completed or completed after 01.07.2017, in the original contract. (d) Derive the rate of materials, KVAT items required or used to complete the balance works. (e) Deduct the "KVAT" amount from those materials and the service tax, if applicable. (f) Add the applicable "GST" on those items. (g) Input Credit on the materials is to be arrived at and be set off as against the for those assessed under output GST, regular VAT. (h) Further, the “tax difference” should be calculated on such balance works executed or to be executed after 01.07.2017 separately. (i) Based on the result obtained on calculation of the tax difference on the concerned department/ contract value, authority has to decide whether agreement needs to be changed or not. (j) A supplementary agreement may be signed with the Petitioners for the revised GST-inclusive work value for the Balance Work completed or to be completed as - 6 - NC: 2025:KHC:11842 WP No. 23352 of 2023 than is more determined above and in case the revised GST-inclusive work value for the Balance Work, completed or to be completed after the original 01.07.2017, agreement work value, the Petitioners are to be paid /reimbursed, as the case may be, the differential tax amount by the concerned employer; so also, in case payments for works completed pre-GST are made post- GST, the concerned employer has to pay or the reimburse, as differential tax amount, to the Petitioners. the case may be, (iii) Petitioners are directed to submit comprehensive representations to the respective employers/Respondents within a period of 4 weeks from the date of receipt of a copy of this order, irrespective of whether they have completed the works pre-GST or post-GST or payments were received or yet to be received post-GST. (iv) If such representations are submitted, the respective employers/Respondents are directed to consider and dispose of the same in the light of the aforesaid directions / guidelines as expeditiously as possible and at any rate within a period of 8 weeks from the date of submission of the representations. (v) In view of the interim orders passed by this Court in the present petitions, such of the petitioners who had not filed their GST returns during the period after 01.07.2017 are permitted to file their returns / amended returns, pursuant to the calculation of the differential tax as per procedure - 7 - NC: 2025:KHC:11842 WP No. 23352 of 2023 above under GST regime, without insisting on interest or penalty or limitation. (vi) The GST authorities are also directed not to take precipitative action against the Petitioners for a period of 6 months from the date of receipt of a copy of this order. (vii) Liberty is reserved in favour of the petitioners to challenge any order / decision passed / taken by the respondents or the authorities, subsequent to this order and also take recourse to such remedies as available in law." 4. A Co-ordinate Bench of this Court in the case of Shri. M.G. Arunkumar Vs. The State of Karnataka and another – W.P.No.104908/2023 dated 29.08.2023 followed the aforesaid order and allowed the petition. The Co- ordinate Bench has held as follows: "5. It is not in dispute that the entire tender process and allocation of work by respondent/Department is post coming into force of Goods and Services Tax. If petitioner, who is a registered Civil Contractor has completed the tender work, respondent/Department being a service recipient is under bounden duty to reimburse GST amount of Rs.2,16,51,903/- in terms of Section 13 of The Central Goods and Services Tax Act, 2017. It is - 8 - NC: 2025:KHC:11842 WP No. 23352 of 2023 also not in dispute that petitioner, who is a class-I contractor having rendered service, is under mandatory duty to pay GST amount to the department. Equally respondent/Department is under bounden duty to reimburse the GST amount. It is borne out from the records that since necessary payment at the petitioner's end the applicable GST being statutory requirement, the respondent/Department ought to have reimbursed 12% GST amount on the total work done by petitioner. Since, there is total inaction on the part of respondent/Department, this is a fit case where mandamus needs to be issued. For the reasons stated supra, I proceed to pass the following: ORDER i) Writ petition is allowed. ii) The respondent is hereby directed to reimburse GST amount as indicated in the representation dated 15.04.2023 vide Annexure-E. iii) The respondent/Department shall reimburse the said amount within a period of six weeks from the date of receipt of copy of this order.” In the light of the issue having been answered by this Court as well as the Co-ordinate Bench of this Court (supra), the petition deserves to be allowed. - 9 - NC: 2025:KHC:11842 WP No. 23352 of 2023 5. For the aforesaid reasons, the following: ORDER i. The petition is allowed and disposed of in terms of the aforesaid judgments of this Court in the cases of Chandrashekaraiah and M.G.Arun Kumar referred to in the body of this order. ii. The concerned respondent Nos.9 to 13 are directed to consider the representations at Annexures – C1 to C5 dated 20.09.2023 submitted by the petitioner and proceed further in accordance with law within a period of six weeks from the date of receipt of a copy of this order, in terms of judgments of this Court in the cases of Chandrashekaraiah and M.G.Arun Kumar referred to in the body of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 1 Sl No.: 98