Naganath Constructions Vs Government of Karnataka (Karnataka High Court)
Summary: The petitioners sought reimbursement of differential GST arising when the GST regime replaced VAT during their civil works contracts. They stated that they had discharged the additional tax liability and asked the State to reimburse it, with interest at 18% per annum. The Karnataka High Court referred to its decision in W.P. No.104908/2023, dated 29.08.2023, which held that the recipient of works contract services must bear the differential tax arising from the introduction of GST and that the State and its instrumentalities must reimburse the contractor. The Court allowed the writ petitions and directed the respondents to consider the specified representations, determine the differential GST payable in accordance with law, and reimburse the determined amount within six weeks of receiving a certified copy of the order. Reimbursement is confined to tax attributable to the GST transition and remains subject to verification of records and calculations. The operative order does not award the interest sought by the petitioners.
Cases Discussed
- M.G. Arunkumar Vs State of Karnataka (Karnataka High Court, Dharwad Bench), W.P. No.104908/2023, decided on 29.08.2023 — relied upon for the obligation of the recipient department to reimburse GST paid by a civil contractor. The cited decision concerned a contract awarded after GST came into force.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
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