Shri. Jagadish S/O. Venkangouda Jakkangoudar vs. The Executive Engineer
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The petitioner, Shri Jagadish, a contractor, filed a writ petition seeking a Mandamus directing the respondents, the Executive Engineer of the Panchayath Raj Engineering Department and the Executive Engineer of the Public Works Department, to pay him Rs. 54,00,052.36/- towards applicable GST. This amount represents the GST payable by the respondents as detailed in the petitioner's representations dated 13.10.2020 and 04.12.2020, along with accrued interest at 18% per annum from the date of payment by the petitioner until realization by the respondents. The petitioner contended that his case is covered by a decision of a Co-ordinate Bench of the same High Court in Writ Petition No. 9721 of 2019 and connected matters, disposed of on 11.04.2023. The respondents did not present any specific opposition.
Held
The Court held that the writ petition is disposed of in terms of paragraph 20 of the order dated 11.04.2023 passed in Writ Petition No. 9721/2019 and connected matters. This means the Court adopted the directions and guidelines set forth in the prior judgment. These directions involve the respondents (State and Government agencies) calculating works executed pre-GST under the KVAT regime and payments received. Payments for works executed before 01.07.2017 are to be assessed under the KVAT regime. For balance works completed or to be completed after 01.07.2017, the material and service tax amounts are to be identified, KVAT deducted, and applicable GST added. Input credit is to be set off against output GST. A "tax difference" is to be calculated for works executed after 01.07.2017. The concerned department must decide if the agreement needs changes and may sign a supplementary agreement for the revised GST-inclusive work value. If the revised value is higher, the employer must pay or reimburse the differential tax amount to the petitioner. Similarly, if payments for pre-GST works are made post-GST, the employer must pay or reimburse the differential tax. Petitioners are directed to submit comprehensive representations within 4 weeks, and respondents must dispose of them within 8 weeks. Filing of GST returns post-01.07.2017 is permitted without interest, penalty, or limitation, and GST authorities are directed not to take precipitative action for 6 months. Liberty is reserved to challenge subsequent orders.
Key Issues
1. Whether the petitioner is entitled to a Writ of Mandamus directing the respondents to pay him the sum of Rs. 54,00,052.36/- towards applicable GST and accrued interest. Petitioner's Argument: The petitioner argued that his case is squarely covered by the decision of a Co-ordinate Bench of the High Court in Writ Petition No. 9721 of 2019 and other connected matters, disposed of on 11.04.2023. He submitted that the same order should be passed in his matter. The petitioner relied on the principles laid down in that judgment concerning the calculation and payment of GST on works contracts, particularly where works were executed partly before and partly after the introduction of GST, and where payments might have been made or received post-GST for pre-GST work. Respondents' Argument: The judgment records no specific arguments presented by the respondents' counsel. However, their lack of particular opposition suggests an acquiescence to the petitioner's submission regarding the applicability of the co-ordinate bench's order.
Sections Cited
Section 73, Section 129
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Cause title — parties, addresses and appearances
ORAL ORDER
Sri.Sourabha Mirje., learned counsel on behalf of Sri.Shivraj S.Balloli., for the petitioner, Sri.Bhushan Kulkarni., learned counsel for respondent No.1 and Sri.Shivaprabhu. S.Hiremath., learned AGA for respondent No.2 have appeared in person.
The captioned Writ Petition is filed seeking a Writ of Mandamus directing respondents to pay to the petitioner a sum of Rs.54,00,052.36/- (Rupees Fifty-Four Lakhs and Fifty-Two and Thirty Six Paise only) towards the applicable GST payable by respondents as detailed by the petitioner in representations dated:13.10.2020 and 04.12.2020 vide Annexures-J to J5 along with the accrued interest thereon at the rate of 18 percent per annum from the date of payment of the GST amount by the petitioner till the date of actual realization of the same by the respondents.
Learned counsel for the respective parties urged several contentions. Heard, the contentions urged on behalf of NC: 2024:KHC-D:12090 respective parities and perused the Writ papers with utmost care.
Learned counsel for the petitioner submits that a memo has been filed stating that the lis is covered by the decision of a Co-ordinate Bench of this Court in Writ Petition No.9721 of 2019 and other connected mattes, disposed of on 11.04.2023. Counsel therefore submits that the same order may be passed in the present matter also. There is no particular opposition by the respondents counsel.
Paragraph 20 of the said order is reproduced hereunder for easy reference:
“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 NC: 2024:KHC-D:12090 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. 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 NC: 2024:KHC-D:12090 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 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. NC: 2024:KHC-D:12090 (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.”
Paragraph 20 is applicable. Hence, I pass the following order: The Writ Petition is disposed of in terms of paragraph 20 of the order dated:11.04.2023 passed in Writ Petition No.9721/2019 and connected matters. (JYOTI MULIMANI) JUDGE
MRP LIST NO.: 3 SL NO.: 40
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.