Writ Petition No. 34918 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:10785 WP No. 34918 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 34918 OF 2024 (T-RES) …PETITIONER BETWEEN: SHRI MOHAMMAD NIZAR K AGED ABOUT 44 YEARS PWD CONTRACTOR RANIPET, MADIKERI KODAGU – 571 201. (BY SMT. LAKSHMI MENON.,ADVOCATE) AND: 1. 2. STATE OF KARNATAKA FINANCE DEPARTMENT II FLOOR VIDHANA SOUDHA BENGALURU – 560 001. REP BY ADDL CHIEF SECRETARY. THE DEPUTY DIRECTOR, DIRECTORATE GENERAL OF GST INTELLIGENCE MANGALURU REGIONAL UNIT D NO 6-4-103 AND 103/1, BHARATH NIVAS OPP GANDHI PARK, GANDHINAGAR, MAMMAGUDDA MANGALURU – 575 003. 3. OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL TAX MYSORE RURAL DIVISION, S1 AND S2, GST BHAWAN, SIDDARTHA LAYOUT, VINAY MARG MYSORE - 570 011. 4. OFFICE OF THE EXECUTIVE ENGINEER PUBLIC WORK DEPARTMENT KODAGU DIVISION, MADIKERI -571 201.
Legal Reasoning
Digitally signed by LEELAVATHI S R Location: High Court of Karnataka - 2 - NC: 2025:KHC:10785 WP No. 34918 of 2024 5. OFFICE OF THE EXECUTIVE ENGINEER RURAL DEVELOPMENT ENGINEERING DIVISION, MADIKERI – 577 1201. 6. OFFICE OF THE EXECUTIVE ENGINEER MINOR IRRIGATION DIVISION, MANGALORE - 575 001. 7. OFFICE OF THE EXECUTIVE ENGINEER RURAL DRINKING WATER AND SANITATION DIVISION, KODAGU DISTRICT -571 201.
Legal Reasoning
(BY SRI. K. HEMA KUMAR, AGA) …RESPONDENTS THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTION IN THE NATURE OF CERTIORARI TO SET ASIDE THE SHOW CAUSE NOTICE IN FORM GST DRC-01 VIDE SCN NO.01/2023-24 MRU(DD) DATED ISSUED BY THE RESPONDENT NO.3.AND ETC. 08.05.2023 THIS PETITION, COMING ON FOR ORDERS, 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) To issue a writ of Certiorari or order or direction in the nature of Certiorari IN 2003 DSS to set aside the Show Cause Notice No.01/2023-24-MRU (DD), bearing DIN No.202305DSS10000722577 issued by the Respondent No.2 dated 08-05-2023 (ANNEXURE A); b) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Impugned
Decision
Order dated 04-06-2024 bearing DIN - 3 - NC: 2025:KHC:10785 WP No. 34918 of 2024 No.20240657Y000031313E passed by Respondent No.3 under section 74 of the GST Act, 2017 (ANNEXURE B): c) Alternatively, in the event the demand under section 74 of the GST Act, 2017 bearing DIN No. 20240657Y000031313, impugned Order bearing No.MYS- GST-000 Mysuru Rural HS-A 10/2024-25, dated 04-06-2024 (ANNEXURE - B) is not set aside in toto For revives due to operation of law, then, issue a writ of Mandamus order or direction in the nature of Mandamus directing the Respondent No.4, 5, 6 and 7 to enter into a Supplementary Tender Agreement, or any other permissible arrangement revise the rate of applicable taxes and pay the differential GST liability imposed on the Petitioner, (CGST and KGST component) and also pay the Petitioner interest at the applicable rates and penalty (CGST and KGST component); and issue a writ of Mandamus order or direction in the nature of Mandamus directing the Respondent No.2 to verify the GST returns for availment of input tax credit for the period March 2020 with the newly inserted provision Section 16(5) of the GST Act, 2017; and d) Grant any other orders that this Hon'ble Court deems fit and proper in the interest of justice.” 2. Heard learned counsel appearing for the petitioner and learned AGA for respondent Nos.1 to 7 and perused the material on record. - 4 - NC: 2025:KHC:10785 WP No. 34918 of 2024 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: "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. - 5 - NC: 2025:KHC:10785 WP No. 34918 of 2024 (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 contract value, concerned department/ 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 determined above and in case the revised GST-inclusive work value for the Balance Work, completed or to be completed after 01.07.2017, 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 differential tax amount, to the Petitioners. the case may be, is more than (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 - 6 - NC: 2025:KHC:10785 WP No. 34918 of 2024 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." - 7 - NC: 2025:KHC:10785 WP No. 34918 of 2024 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 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 - 8 - NC: 2025:KHC:10785 WP No. 34918 of 2024 mandamus needs to be issued. For the reasons stated supra, I proceed to pass the following: i) Writ petition is allowed. ORDER 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 a co-ordinate Bench of this Court (supra), the petition deserves to be allowed. 5. For the aforesaid reasons, the following: ORDER i. The petition is allowed and disposed of in terms of the order passed 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. ii. The concerned respondents are hereby directed to reimburse the differential GST amount as indicated - 9 - NC: 2025:KHC:10785 WP No. 34918 of 2024 in the impugned order at Annexure-B dated 04.06.2024 back to the petitioner, within a period of six weeks from the date of receipt of a copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE BMC List No.: 1 Sl No.: 106