Karnataka HC Orders Reasoned Decision on Contractor’s GST Payment Claims

Jinaraj And Co Registered Vs Executive Engineer (Karnataka High Court)

Summary: The writ petition was filed by Shri Jinaraj and Co Registered Partnership Firm, a Class-I Civil Contractor, seeking directions to the respondent authorities to consider its representations dated 19.08.2024 and pay the GST amounts claimed in relation to works executed for the authorities. The petitioner sought payment of Rs.2,61,39,730/- from respondent No.1, Rs.25,18,601/- from respondent No.2 and Rs.12,44,109/- from respondent No.3.

The petitioner claimed to have been awarded several works relating to improvement and construction of roads during 2018-2019 to 2022-2023. Its principal grievance was that, although the tendered rates included all duties and taxes leviable and payable by the contractor, GST was subsequently leviable at the applicable rate of 12%. The petitioner contended that, under the statutory scheme governing GST, the tax component was ultimately liable to be borne by the recipient of the taxable service. Despite GST liability and the invoices/bills raised for the works executed, the respondent authorities had not considered the petitioner’s representations seeking payment of the GST component.

The respondents opposed the claim. Their stand was that the petitioner had quoted tender rates inclusive of all taxes and duties and that the bills raised by the petitioner had already been scrutinized and paid, inclusive of applicable taxes. It was therefore contended that no further amount towards GST was payable. The respondents further maintained that the rates quoted by the petitioner themselves included the 12% GST component and that additional bills could not be raised over and above the tendered and accepted rates.