M/S Sweet Home Constructions R/By The Proprietor Of The Firm Sri Shivanand R Shetty vs. The Government Of Karnataka

Facts

The petitioner, M/s. Sweet Home Constructions, filed a writ petition seeking a mandamus directing the respondents to refund the differential Goods and Services Tax (GST) amount paid for works executed. The petitioner had submitted representations dated 21-11-2024 to the Executive Engineer, PWD, Karwar Division (Respondent No. 2), seeking this refund. The petition was filed under Article 226 and 227 of the Constitution of India. The petitioner's counsel argued that the issue was already decided by a Coordinate Bench of the High Court in a previous writ petition.

Held

The Court allowed the writ petition, directing the respondents to reimburse the GST amount as indicated in the petitioner's representation dated 21.11.2024. The Court found that the issue in the present lis was already answered by a Coordinate Bench in W.P.No.9721/2019, which was disposed of on 11.04.2023. The previous judgment provided detailed guidelines for calculating the differential tax on works contracts executed before and after the GST regime. It directed the calculation of works executed pre-GST under the KVAT regime and payments received, and then the balance works completed or to be completed post-GST. The court in the prior judgment had also directed that if the revised GST-inclusive work value for the balance work was more than the original agreement value, the employer had to pay or reimburse the differential tax amount. The present Court followed this precedent, holding that the petitioner was entitled to the reimbursement sought. The respondents were directed to reimburse the amount within six weeks from the date of receipt of a copy of the order.

Key Issues

1. Whether the petitioner is entitled to a refund of the differential GST amount paid for works executed, as per their representation dated 21-11-2024? (Question of law and fact, turning on the interpretation of tax liability on works contracts executed across the pre-GST and post-GST periods). Petitioner's contention: The petitioner argued that the issue stands answered by a judgment of a Coordinate Bench in W.P.No.9721/2019, disposed of on 11.04.2023. They relied on the directions issued in that judgment concerning the calculation and reimbursement of differential tax amounts for works contracts executed before and after the introduction of GST. Revenue/State's contention: The judgment records no specific arguments from the respondents. The learned AGA represented the State (Respondent No. 1) and counsel represented Respondent No. 2.