Judgment
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HC-KAR
CNR: KAHC010566842026 NC: 2026:KHC:45750 WP No. 25871 of 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF AUGUST, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25871 OF 2026 (T-RES) BETWEEN:
SRI VENKATA SUBBAIAH S/O LATE VENKATA RAMAIAH AGED ABOUT 65 YEARS CLASS-1 PWD CONTRACTOR HAVING OFFICE AT NEHRU NAGAR, 1ST CROSS, SHIMOGA DISTRICT, SAGAR- 577401 …PETITIONER (BY MS. MONISHA SEN, 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 EXECUTIVE ENGINEER, KARNATAKA PUBLIC WORKS DEPARTMENT, SHIMOGA DIVISION, BALRAJ URS ROAD, SHIMOGGA- 577201
Digitally signed by VANAMALA N Location:
HIGH COURT OF KARNATAKA
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HC-KAR
CNR: KAHC010566842026 NC: 2026:KHC:45750 WP No. 25871 of 2026
3.
THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS), MALNAD DIVISION, SHIVAMOGGA-577201
4.
THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) SWAMY ARCADE, KUVEMPU NAGAR MAIN ROAD.
OPP. HDFC HOME LOAN BANK, KUVEMPUNAGAR, HASSAN-573201 …RESPONDENTS (BY SRI. K. HEMA KUMAR, AGA ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING ISSUE A WRIT OR SUCH OTHER ORDER IN THE NATURE OF MANDAMUS DIRECTING R2 TO PAY THE DIFFERENTIAL GST AMOUNT (BEING THE DIFFERENCE BETWEEN VAT AND GST) AS PER THE REPRESENTATIONS DATED 09-06-2026 PRODUCED AT ANNEXURE-L. B) QUASH THE IMPUGNED ORDER UNDER SECTION 107(11) OF THE CGST/KGST ACT, 2017, ISSUED IN FORM GST APL- 01, FOR THE TAX PERIOD 2017-18, TO THE PETITIONER DATED 20.05.2026 BEARING ORDER REFERENCE NO.
ZD2905260961623, WHICH IS PRODUCED AT ANNEXURE-J ISSUED BY R3. C) QUASH THE BANK ATTACHMENT, ISSUED IN FORM GST DRC- 25, FOR THE TAX PERIOD 2017-18, AGAINST THE PETITIONER DATED 25.05.2026 WITH BEARING NO.
VAA.THE.SA.AA.(LE.PA.)/HASSAN/2026-27/T-71 WHICH IS PRODUCED AT ANX-K ISSUED BY R4. D) QUASH THE IMPUGNED ORDER UNDER SECTION 73(9) OF THE CGST/KGST ACT, 2017, ISSUED IN FORM GST DRC-07, FOR THE TAX PERIOD 2017-18, TO THE PETITIONER DATED 01.08.2023 BEARING ORDER NO.
A.C.C.T.(AUDIT)/HSN/GST-ADT/S.79/2023-24/T- NDDRC-07 REFERENCE NO. ZD290823000707B, WHICH IS PRODUCED AT ANNEXURE-F AND F1 ISSUED BY R4.
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HC-KAR
CNR: KAHC010566842026 NC: 2026:KHC:45750 WP No. 25871 of 2026
E) QUASH THE SCN ISSUED UNDER SECTION 73(5) OF THE CGST/KGST ACT, 2017, ISSUED IN FORM GST DRC-01, FOR THE TAX PERIOD 2017-18, TO THE PETITIONER DATED 27.06.2023 BEARING REFERENCE NO.A.C.C.T.
(AUDIT)/HSN/GST-ADT/DRC-01/2023- 24/T-, WHICH IS PRODUCED AT ANNEXURE-E ISSUED BY R4. F) DIRECTING THE RESPONDENT NO.1 STATE GOVT, TO ISSUE A CIRCULAR/POLICY TO ADDRESS THE ISSUE OF PAYMENT OF GST ON WORKS CONTRACTS WHICH ARE EXECUTED UNDER VAT REGIME WHEREIN GST IS NOT PALD BY THE RESPONDENT NO.2.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner has called in question the following while seeking direction to the second the Respondents to pay the differential GST amount (being the difference between VAT and GST) as per the representations dated 09-06-2026 [ANNEXURE- L].
The Order dated 20.05.2026 bearing Order Reference No.
ZD2905260961623 Section 107(11) of the CGST/KGST Act, 2017 ANNEXURE-J
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HC-KAR
CNR: KAHC010566842026 NC: 2026:KHC:45750 WP No. 25871 of 2026
for the Financial Year 2017-18 The Show Cause Notice Section 73(5) of the CGST/KGST Act, 2017, issued in FORM GST DRC-01
Annexure - E The Adjudication Order/ Summary Thereof Section 73(9) of the CGST/KGST Act, 2017, issued in FORM GST DRC-07 ANNEXURE-F AND F1 the Bank Attachment dated 25.05.2026 issued in FORM GST DRC-25 Annexure - K
Ms. Monisha Sen, the learned counsel for the petitioner, and Mr. K. Hema Kumar, a learned Additional Government Advocate who accepts notice for the respondents, are heard. The petitioner in calling in question the Adjudication Order and the Order of the Appellate Authority, is in effect relying upon a decision of this Court in the case of Sri Chandrashekharaiah and Others V/s. State of
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HC-KAR
CNR: KAHC010566842026 NC: 2026:KHC:45750 WP No. 25871 of 2026
Karnataka and Others in W.P.No.9721/2019 decided on 11.04.2023.
However, a Division Bench of this Court has interfered with this decision specifically holding that any dispute between the supplier and the recipient on the tax value being part of the price or not being paid by the supplier, is a matter that should be worked out between the supplier and the recipient, and the recipient will have to discharge the liability.
Ms. Monisha Sen argues for a remand stating that the Adjudication order is an ex parte order and there was a request for an opportunity of personal hearing but in the circumstances, this Court is not persuaded, and therefore, the petition stands rejected.
Sd/- (B M SHYAM PRASAD) JUDGE RB