Shri. Jinaraj And Co Registered Partnership Firm vs. The State Of Karnataka

Facts

The petitioner, Shri Jinraj & Co., a civil contractor, was awarded contract works under the Namma Grama Namma Yojane scheme and for road improvement. These contracts were awarded after July 1, 2017, falling under the GST regime. The petitioner completed the works and sought payment with GST at 18%. However, the respondents (Executive Engineer, Project Division, Karwar and State of Karnataka) made payments calculating GST at 12%. The petitioner submitted a representation on December 18, 2023, seeking the differential GST amount of Rs. 42,77,779/- at 6% for three works. The petitioner relied on previous High Court judgments where similar claims for balance GST were directed to be reimbursed.

Held

The Court held that there was no dispute regarding the award and successful completion of the contracts by the petitioner, nor about the payment made by the respondents. The core issue was the petitioner's allegation that the reimbursement for the tax component was only 12% while the applicable GST was 18%. In light of the ratio of the decisions relied upon by the petitioner (which the Court implicitly accepted as binding in similar circumstances), the respondents would be liable to reimburse the entire GST. Therefore, the Court directed the respondents to consider the petitioner's representation dated December 18, 2023, compute the total applicable GST, compare it with the amount already paid, and take steps to pay the balance amount within four weeks of receiving a certified copy of the order.

Key Issues

1. Whether the respondents are liable to reimburse the balance GST amount to the petitioner, considering the contracts were awarded under the GST regime and the petitioner claims a differential of 6% (18% vs. 12%) on the completed works, as per Section 7 of the CGST Act, 2017 (implied by the context of GST applicability)? Petitioner's arguments: The petitioner contended that the contracts were awarded post-GST implementation, and the applicable GST rate should be 18%. They argued that the respondents erroneously paid only 12% GST, leading to a shortfall of 6%. The petitioner cited previous High Court decisions in W.P.no.104908/2023 and W.P.no.9721/2019, which directed reimbursement of balance GST amounts in similar circumstances. Respondents' arguments: The learned AGA for the respondents submitted that while the petitioner's claim for the entire GST extent might be justified, the exact amount claimed would necessitate factual verification.