B H Ramachandra vs. Karnataka State Small Industries
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Cause title — parties, addresses and appearances
ORAL ORDER In this petition, petitioner seeks for the following reliefs: “a. To direct the respondent to reimburse GST amount paid to an extent of Rs.2,47,71,743/- by petitioner for period 2017-18, 2018-2019, 2019-20, 2020-21 and 2021-22 till completion of project at rate of 24% interest from date of payment made by petitioner to Government and therefore, this Hon’ble Court be pleased to direct the first respondent to refund the GST amount paid by petitioner.
b. or alternatively direct the first respondent to the respondent No.1 to consider the representation made by petitioner at Annexure-J.
c. Pass such other orders as may be deemed appropriate under the circumstances of the case, in the ends of justice.”
Heard learned counsel for petitioner and learned counsel for 1st respondent as well as learned HCGP for 2nd respondent and perused the material on record. NC: 2025:KHC:14863
The issue in controversy involved in the present petition is directly and squarely covered by the judgment of this Court in the case of M/s.Green Soul Life Spaces Pvt. Ltd., vs. KSSIDC & others W.P.No.25071/2023 dated 02.04.2024 and as such, the present petition also deserves to be allowed and disposed of accordingly. The said judgment reads as under:-
“1. In this petition the petitioner seeks the following reliefs: a. To direct the respondent to reimburse GST amount paid by the petitioner for period 24.05.2019 onwards till completion of project and also at rate of 24% interest from date of payment made by petitioner to Government and therefore this Hon’ble Court be pleased to direct the first respondent to refund the GST amount paid by petitioner. b. Or alternatively direct the first respondent to consider the representations dated 07.08.2023, 05.01.2023, 06.12.2022, 15.09.2022, 07.09.2022, 02.08.2022, 03.02.2022 and 20.04.2021 produced as Annexure- E, F, G, H, J, K, L and M.
Heard learned counsel for petitioner and learned counsel for respondents.
In addition to reiterating the various contentions urged in the petition and referring to the material on record learned counsel for petitioner invited my attention to the short term tender notification dated 01.02.2019 in order to point out that the same stipulates that GST shall be paid by the petitioner to the tender amount separately pursuant to which a work order dated 24.05.2019 was issued wherein rate was NC: 2025:KHC:14863 shown excluding the GST. It is submitted that the fact that rates quoted by the petitioner was exclusive of GST is also confirmed by general notice to the SR of Civil Works, Shivamogga, for the year 2018-19 (Annexure Q) wherein it is stated that GST at 12% shall be added separately as per Government letter dated 11.10.2018 and a separate clause mentioning that GST shall be paid to the tendered amount separately is to be published. It is also pointed out that the petitioner having paid the GST, respondents had reimbursed the said GST towards four running bills and subsequently when the respondents refused to reimburse the GST for the remaining bill amounts and illegally purported to deduct the earlier amounts paid from the bills payable to the petitioner, petitioner is before this Court by way of present petition.
Per contra learned counsel for respondents invited my attention to the schedule agreement at Annexure – C dated 24.05.2019 entered into between the petitioner and respondent No.1 in order to point out that clause 36 of the said agreement stipulates that rates to be quoted by the contractor must be inclusive of sales tax/VAT and no extra demand on this count shall be made by the contractor. In this context, it is submitted that after coming into force of the GST regime with effect from 01.07.2017, the question of payment of sales tax/VAT would not arise and said expression `sales tax/VAT’ is a misnomer and same would refer to GST that would be excluded from the rates quoted by the petitioner. It is therefore submitted that after having realized its mistake, respondent No. 1 not only informed the petitioner that it would not be liable to reimburse the GST but also deducted the GST already paid in favour of the NC: 2025:KHC:14863 petitioner and as such there is no merit in the petition and the others, W.P. No. 104908/2023 dated 29.08.2023. 6. A perusal of the material on record, in particular the cumulative effect of the short term tender notification dated 01.02.2019 containing clause C to note No. 1 which stipulates that GST shall be paid to the tendered amount separately as per Rules and applicable Government Orders and notice to the tender notification as well as the work order and other documents will clearly indicate that the rate quoted by the petitioner was exclusive of GST and did not include the same as contended by respondent No.
So also, merely because Clause 36 of the scheduled agreement includes sales tax and VAT, in the absence of any material to show that sales tax and VAT include GST also and that the rates quoted by the petitioner include GST, I am of the considered opinion that respondent No.1 is liable to reimburse the GST paid in favour of the petitioner. It is also significant to note that respondent No. 1 had already reimbursed the GST on four running bills of the petitioner and only reason assigned by the respondent No.1 in its objection dated 28.10.2020 (Annexure R-1) is to the effect NC: 2025:KHC:14863 that it will cause huge burden on respondent No.1 which is not sustainable in law. It is needless to state that huge burden being caused to respondent No.1 on account of GST reimbursement in favour of the petitioner cannot be made a basis for respondent No.1 to avoid its liability to reimburse GST payable in favour of the petitioner.
As rightly contended by the learned counsel for petitioner, in the case of M.G. Arunkumar (supra), under identical circumstances, this Court held as under:
“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 mandamus needs to be issued. For the reasons stated supra, I proceed to pass the following: ORDER i) Writ petition is allowed. ii) The respondent is hereby directed to reimburse GST amount as indicated in the representation dated 15.04.2023 vide Annexure-E. NC: 2025:KHC:14863 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 view of the aforesaid facts and circumstances, I am of the considered opinion that respondent No. 1 would have to be held liable to reimburse the GST to the petitioner on all its bills as per Annexure-N, within a stipulated time frame. In the result, the following; O R D E R i. Writ petition is hereby allowed. ii. Respondent No.1 is hereby directed to reimburse GST paid by the petitioner as detailed/enumerated in Annexure N within a period of 2 months from the date of receipt of copy of this order.”
In view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition in terms of the aforesaid judgment and issue necessary directions in this regard.
In the result, I pass the following:- ORDER
(i) Petition is hereby allowed.
(ii) The 1st respondent-KSSIDC is hereby directed to reimburse the GST paid by the petitioner as detailed / enumerated in Annexure-S dated 13.09.2024 in favour of the petitioner within a NC: 2025:KHC:14863 period of two months from the date of receipt of a copy of this order. (S.R.KRISHNA KUMAR) JUDGE
MDS/SRL List No.: 1 Sl No.: 60
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.