Writ Petition No. 25439 of 2023 · The High Court
Case Details
- 1 - NC: 2024:KHC:6834 WP No. 25439 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 25439 OF 2023 (GM-RES) BETWEEN: M/S MYCON CONSTRUCTION LIMITED, A COMPANY REGISTERED UNDER COMPANIES, ACT 1956, HAVING ITS OFFICE AT INDUSTRY HOUSE, NO. 45, RACE COURSE ROAD, BENGALURU - 560 001 …PETITIONER Digitally signed by NAGAVENI Location: HIGH COURT OF KARNATAKA REPRESENTED BY ITS DIRECTOR ANIL KUMAR MALPANI, AGED ABOUT 67 YEARS. (BY SRI. NAVEEN G.S., ADVOCATE) AND: 1. STATE OF KARNATAKA, DEPARTMENT OF FINANCE, 2ND FLOOR, VIDHANA SOUDHA, DR. AMBEDKAR VEEDHI, BENGALURU - 560 001 REPRESENTED BY ITS ADDITIONAL CHIEF SECRETARY. 2. THE CHIEF ENGINEER, KARNATAKA HOUSING BOARD, 3RD AND 4TH FLOOR, - 2 - NC: 2024:KHC:6834 WP No. 25439 of 2023 CAUVERY BHAVAN, BENGALURU - 560 009. 3. THE COMMISSIONER, KARNATAKA SLUM DEVELOPMENT BOARD, NO.55, ABHAYA COMPLEX, RISALDAR STREET, SHESHADRIPURAM, BENGALURU - 560 020. 4. THE EXECUTIVE DIRECTOR, KARNATAKA RESIDENTIAL EDUCATIONAL INSTITUTIONS SOCIETY (KREIS) 6TH AND 7TH FLOOR, CUNNINGHAM ROAD, BENGALURU - 560 052. 5. THE STATE PROJECT DIRECTOR, RASHTRIYA MADHYAMIK SHIKSHA ABHIYAN KARNATAKA, SARVA SHIKSHA ABHIYANA SAMITHI - KARNATAKA, NEW PUBLIC OFFICES ANNEX, NRUPATHUNGA ROAD, K.R. CIRCLE, BENGALURU - 560 001. 6. THE MANAGING DIRECTOR, KARNATAKA STATE POLICE HOUSING AND INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED, NO.59, RICHMOND ROAD, BENGALURU - 560 025. 7. THE CHIEF ENGINEER, KUWS AND DB, NO. 5 AND 6, JALA BHAVAN, BTM LAYOUT, 1ST PHASE, - 3 - NC: 2024:KHC:6834 WP No. 25439 of 2023 1ST STAGE, BANNERGHATTA MAIN ROAD, BANGALORE - 560 029. 8. THE EXECUTIVE ENGINEER, KUWS AND DB DIVISION, RAMAKRISHNA ASHRAMA ROAD, AMARAJYOTHI NAGAR, TUMKUR - 570 005. 9. THE CHIEF OFFICER, TOWN MUNICIPAL COUNCIL, KUNIGAL, TUMKUR DISTRICT - 572 119. 10. THE EXECUTIVE ENGINEER, NWKRTC, CE DIVISION, CENTRA OFFICE , HUBBALI - 580 009. 11. THE EXECUTIVE ENGINEER, KUWS AND DB DIVISION, JALAMANDALI COMPOUND, SIR. M. VISHWESHVARAYYA ROAD, DHARWAD - 580 001. 12. THE EXECUTIVE ENGINEER, KBJNL, NRBC DIVISION NO.6, CHIKKAHONNAKUNI - 584 111, DEVADURGA TALUK, RAICHUR DISTRICT. 13. THE EXECUTIVE ENGINEER, KBJNL, - 4 - NC: 2024:KHC:6834 WP No. 25439 of 2023 JBC DIVISION -2, BHEEMARAYANAGUDI - 585 287, SHAPUR TALUK, YADGIR DIST. …RESPONDENTS
Legal Reasoning
(BY SMT. NAVYA SHEKHAR, AGA FOR R1) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENTS TO REFUND THE DIFFERENTIAL GST AMOUNT (BEING THE DIFFERENCE BETWEEN GST AND VAT) PAID BY THE PETITIONER FOR EACH OF THE WORKS CONTRACT/COMPOSITE SUPPLY EXECUTED BY THE PETITIONER AND TABULATED AT ANNEXURE-A, AS PER THE REPRESENTATIONS DATED:12.06.2023 PRODUCED AT ANNEXURE-C (COLLY) AND DATED:24.07.2023 PRODUCED AT ANNEXURE-C19 (COLLY) GIVEN BY THE PETITIONER TO RESPECTIVE RESPONDENT-EMPLOYERS AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
Decision
ORDER The petitioner is before this Court, seeking the following prayers: - 5 - NC: 2024:KHC:6834 WP No. 25439 of 2023 "(a) (b) Issue a writ or such other order in the nature of Mandamus directing the Respondents to refund the differential GST amount (being the difference between GST and VAT) paid by the Petitioner for each of the works contract / composite supply executed by the Petitioner and tabulated at Annexure-A, as per the representations dated 12.06.2023 produced at Annexure-C (colly) and dated 24.07.2023 produced at Annexure-C-19 (colly) given by the Petitioner to respective Respondent-employers. Issue a writ or such other order directing the Respondent No.1 State Govt, issue a circular/policy to address the issue of payment of GST on works contract which are executed under VAT regime wherein, GST is not paid by the Respondent-Employers but is levied and paid by the Petitioner-Contractors to the GST department. to (c) Pass such other orders as may be deemed appropriate under the circumstances of the case, in the ends of justice." 2. Heard Sri. Naveen G.S., learned counsel appearing for the petitioner, Smt. Navya Shekhar, learned AGA appearing for respondent No.1 and have 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 the Co-ordinate Bench in W.P.No.9721/2019 and connected cases disposed on 11.04.2023, wherein the Co-ordinate Bench of this Court, has held as follows: - 6 - NC: 2024:KHC:6834 WP No. 25439 of 2023 "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. (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 materials and the service tax, if applicable. from those (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 output GST, for those assessed under 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 contract value, concerned department/authority has to decide whether agreement needs to be changed or not. for (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 determined above and in case the revised GST-inclusive work value the Balance Work, completed or to be completed after 01.07.2017, is more than the original 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 reimburse, as the case may be, the differential tax amount, to the Petitioners. (iii) Petitioners are directed to submit comprehensive representations to the respective employers/Respondents - 7 - NC: 2024:KHC:6834 WP No. 25439 of 2023 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 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. Another Co-ordinate Bench of this Court in terms of its order dated 29.08.2023 in W.P.No.104908/2023 follows the aforesaid order and allows 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 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. - 8 - NC: 2024:KHC:6834 WP No. 25439 of 2023 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, the inaction there of part fit case where this respondent/Department, mandamus needs to be issued. For the reasons stated supra, I proceed to pass the following: on is a total is ORDER i) ii) iii) is hereby directed Writ petition is allowed. The to respondent reimburse GST amount as indicated in the representation vide Annexure-E. The respondent/Department shall reimburse the said amount within a period of six weeks from the date of receipt of copy of this order. 15.04.2023 dated In the light of the issue standing answered, the petition deserves to succeed and the prayer that is sought for is to be allowed. 5. For the aforesaid reasons, the following: ORDER i. The petition is allowed. ii. The respondents are hereby directed to reimburse GST amount as indicated in the representations dated 12.06.2023, 15.06.2023 and 24.07.2023. - 9 - NC: 2024:KHC:6834 WP No. 25439 of 2023 iii. The respondents/Department shall reimburse the said amount within a period of six weeks from the date of receipt of a copy of this order. Sd/- JUDGE SJK List No.: 1 Sl No.: 18 CT:SNN