Sri. Balbheem Katke vs. Deputy Commissioner Of Commercial Taxes (Audit)

The petitioner's case is that the service is covered under the Notification dated 28.06.2017 [Annexure-C] and therefore is a Nil Rated Service. The respondent has concluded the proceedings under Section 74 of the Central Goods and Services Tax Act/Karnataka Goods and Services Tax Act, 2017 [for short, 'the Act'] and the relevant Rules opining that the work entrusted to the petitioner is not just labour- oriented but also involves using materials like steel and cement and therefore the petitioner should have offered GST.

Ms. Monisha Sen, the learned counsel for the petitioner, placing on record a copy of the Communication dated 28.04.2026 issued by the Forest Conservator of Forest and Director, Bandipura Tiger Reserve, submits that the work entrusted to the petitioner only involved removal of lantana with root and plant vegetation as required and widening of the elephant trenches in the forest region. The learned HC-KAR NC: 2026:KHC:27907 counsel submits that the respondent could not have concluded the proceedings under Section 74 of the Act without considering these based only on a certain reference in the Work Order to the use of cement and steel. Mr. K. Hema Kumar, the learned Additional Government Advocate, submits that the Communication is post the impugned order and the petitioner cannot dispute that the Work Orders refer to use of steel and cement required and therefore the petitioner cannot take any exception with the impugned order before this Court under Article 226 of the Constitution of India.

This Court must, at the first instance, observe that the Clarification dated 28.04.2026 from the Conservator of Forest and Director, Bandipur Tiger Reserve is categorical in stating that the work entrusted to the petitioner involved widening of elephant trenches removing earth and the clearing areas of lantana with roots and ensuring seeding for HC-KAR NC: 2026:KHC:27907 vegetation while recording that the reference to the use of steel and cement in the Work Order is part of a template and independent of the work entrusted to the petitioner. This Court must next observe that the respondent ought to have examined the scope of the work on a complete reading of the Work Orders to verify if indeed the work involved use of such materials and not gone by mere reference to “steel or cement” in the Work Orders without examining the payment terms.

This Court in the afore circumstances is persuaded to opine that a case is made out for interference under Article 226 of the Constitution of India to restore the proceedings for reconsideration calling upon the respondent to examine the petitioner's liability under Section 74 of the Act in the light of the Clarification dated 28.04.2026 issued by the Conservator of Forest and Director, Bandipura Tiger Reserve and calling for further information as HC-KAR NC: 2026:KHC:27907 may be necessary. In the light of the afore, the following: ORDER [A] The petition is allowed in-part, and the impugned order dated 31.03.2026 [Annexure- F] is quashed restoring the proceedings to the respondent for reconsideration in the light of this Court's observations as aforesaid.