M/S A B Basavaraju vs. The Assistant Commissioner Of Central Tax
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Cause title — parties, addresses and appearances
ORAL ORDER
Petitioner is before this Court seeking the following prayers: “a) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside the Show Cause Notice bearing No. SCN Sl No.12/2024-25 GST issued the Respondent no. 1 dated 02-08-2024, for FY 2017-18 to 2020-21 (Annexure - B);
b) To issue a writ of certiorari or order or direction in the nature of Certiorari to set aside the Summary Show Cause Notice bearing reference number ZD290824008620F issued by the Respondent no. 1 dated 02-08-2024, in FORM GST DRC-01 from FY 2017-18 to FY 2020-2021 (Annexure-B1);
c) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Impugned Order bearing GEXCOM/SCN/GST/ 10430/2024-TECH dated 04-02-2025 passed by Respondent no. 1 under section 74 of the KGST and CGST Act, 2017, for FY 2017-18 to FY 2020-2021 (Annexure - A);
d) Issue Writ of Certiorari or order or direction in the nature of certiorari to set aside and quash the summary of Impugned Order bearing reference no. ZD290225011043Y order dated 04-02-2024 issued by Respondent no. 1 under section 74 of the KGST and CGST Act, 2017, for FY 2018-19 (Annexure- A1);
e) Alternatively, in the event the demand under section 74 of the GST Act, 2017, Order bearing No. GEXCOM/SCN/GST/10430/2024-TECH dated 04-02-2025 (Annexure-A) is not set aside in toto/or revives due to operation of law, then, issue HC-KAR NC: 2025:KHC:32008 a writ of Mandamus order or direction in the nature of Mandamus directing the Respondent no. 3 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, to the tune of Rs.20,25,040/- (CGST and KVAT component) and also pay the Petitioner interest at the applicable rates and penalty of Rs.20,25,040/-; and f) Grant any other orders that this Hon'ble Court deems fit and proper in the interest of justice.”
Heard Smt.Lakshmi Menon, learned counsel appearing for the petitioner and have perused the material on record.
Learned counsel for the petitioner submits that the issue in the lis stands answered by the order passed by this Court in W.P.No.36235/2024, disposed on 08.04.2025. Learned counsel Sri.Jeevan J Neeralgi, submits that the orders that are quoted in the aforesaid order are all pending in appeal. However, there is no stay.
In the light of the said circumstance, I deem it appropriate to follow the order passed in W.P.No.36235/2024, wherein at para 3, it is observed as under: HC-KAR NC: 2025:KHC:32008 "
Learned counsel for petitioner submits that the issue in the lis stands answered by the judgment rendered by the co- ordinate bench of this Court in W.P.No.9721 of 2019 and connected cases disposed on 11-04-2023. The coordinate bench considering the entire spectrum of law has passed the following order:
“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. HC-KAR NC: 2025:KHC:32008 (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 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.
(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, 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 within a period of 4 weeks from the date of receipt of a copy of this order, irrespective of whether they have completed the HC-KAR NC: 2025:KHC:32008 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.”
In view of the judgment as quoted supra, this petition also deserves to succeed. Therefore, the following:
O R D E R
(i) The Writ Petition is disposed.
(ii) The petitioner is reserved liberty to submit representation seeking such refund. HC-KAR NC: 2025:KHC:32008 (iii) In the event, such representation is submitted within four weeks from the date of receipt of the copy of the order, the respondent-authority shall consider the same and pass necessary orders, in accordance with law, within six weeks thereafter. (M.NAGAPRASANNA) JUDGE
CBC List No.: 1 Sl No.: 373 CT:SS
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.