Case Law Details
State of Karnataka Vs Yogisha R (Karnataka High Court)
The Karnataka High Court heard an appeal filed by the State authorities under Section 4 of the Karnataka High Court Act, 1961, challenging the order dated 26.03.2025 passed by the learned Single Judge in W.P. No.569/2024.
The learned Single Judge had allowed the writ petition by following the decision in Sri. Chandrashekaraiah and others v. State of Karnataka (W.P. No.9721/2019 and connected cases, dated 11.04.2023) and directed the concerned respondents to reimburse the GST amount indicated in the petitioner’s representations (Annexures C1 to C7) within three months.
Before the learned Single Judge, the petitioner had sought consideration of his representation dated 04.12.2023 for release of the GST amount as stipulated under the GST Act. The petitioner had also sought a declaration that the provisions of the GST Act were inapplicable to works contracts where the services had been provided prior to 01.07.2017, insofar as the petitioner was concerned.
The State submitted before the Division Bench that a Co-ordinate Bench of the High Court, in W.A. No.1587/2023 dated 10.06.2026, had clarified that the direction in Chandrashekaraiah requiring reimbursement of differential tax was to be understood as a direction only to the concerned employers and not to the tax authorities.
The State also relied upon the subsequent decision in State of Karnataka and others v. Unique Constructions and others (W.A. No.615/2025), wherein the Co-ordinate Bench considered the decision in Chandrashekaraiah. The extracted observations recorded that the challenge was confined to two aspects: first, that the operative portion of the earlier order enabled filing of GST returns or amended returns after 01.07.2017 by calculating differential tax and also waived interest, penalty and limitation; and secondly, that the State was not liable to reimburse any amount and any direction regarding reimbursement should be understood as applying only to the employer.
The Co-ordinate Bench had further observed that the issue of reimbursement of incremental GST paid or payable by contractors was strictly a matter between the contractors and their employers under the respective contracts. It also observed that contractual arrangements could not alter the statutory scheme governing levy of GST and that liability to pay GST under the relevant enactments had to be determined strictly in accordance with the applicable statutory provisions. The questions relating to levy, assessment, recovery and enforcement of GST were matters governed by statute. Consequently, it observed that no directions could be issued permitting filing of revised returns contrary to the statute or granting waiver of penalty, interest or limitation for filing returns or revised returns.
Considering these subsequent decisions of the Co-ordinate Bench, the Division Bench held that the learned Single Judge could not have directed the concerned respondents to reimburse the GST amount merely by relying upon Chandrashekaraiah. According to the Court, the appropriate course was to direct the authorities to consider the petitioner’s representations in accordance with law.
Accordingly, the High Court modified the order dated 26.03.2025 passed by the learned Single Judge. Instead of directing reimbursement, it directed the concerned authorities to consider the petitioner’s representations at Annexures C1 to C7 in accordance with law within six weeks from the date of uploading of the present order. The writ appeal was disposed of accordingly.
Cases Discussed:
- State of Karnataka and others v. Unique Constructions and others, W.A. No.615/2025.
- Sri. Chandrashekaraiah and others v. State of Karnataka, W.P. No.9721/2019 and connected cases, dated 11.04.2023.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The State authorities are in appeal filed under Section 4 of the Karnataka High Court Act, 1961, questioning the order dated 26.03.2025 passed in W.P.No.569/2024 by the learned Single Judge, where under the following order has been passed:
“i. The petition is allowed and disposed of in terms of the order passed by this Court in the case of Sri. Chandrashekaraiah and others Vs. The State of Karnataka – W.P.No.9721/2019 and connected cases dated 11.04.2023.
ii. The concerned respondents are hereby directed to reimburse GST amount as indicated in the representations at Annexures- C1 to C7 back to the petitioner, within a period of three months weeks from the date of receipt of a copy of this order.”
2. Heard the learned Additional Government Advocate Sri. Adithya Vikram Bhat, for the appellants/State, learned counsel Sri. Halesha R. Gavimath, for respondent No.1 and learned counsel Sri. Aravind V. Chavan, for respondent Nos.2 to 5.
3. The respondent No.1/petitioner was before the learned Single Judge in the aforesaid writ petition with a prayer to consider his representation dated 04.12.2023 and to release the GST tax amount as stipulated by the GST Act, with a further prayer to declare that the provisions of GST Act is inapplicable in respect of the works contract where ‘provisions of service’ are made prior to 01.07.2017, insofar as petitioner is concerned.
4. Learned Single Judge solely on the basis of law laid down by this Court in the Case of Chandrashekaraiah and others vs. State of Karnataka – W.P.No.9721/2019 and connected cases dated 11.04.2023, disposed of the writ petition with the above directions.
5. Learned Additional Government Advocate Sri. Adithya Vikram Bhat, brought to the notice of this Court that the Co-ordinate Bench of this Court in W.A.No.1587/2023 dated 10.06.2026, clarified that the direction issued to the respondent i.e., Tax authorities to reimburse the differential tax is required to be construed as a direction only to the concerned employers and not to the tax authorities. In W.A.No.615/2025, State of Karnataka and others vs. Unique constructions and others where also the Co-ordinate Bench of this Court considered Chandrashekaraiah (supra) and while disposing of the said writ appeal at paragraph Nos.9, 10 and 11 has observed as follows:
“9. The learned counsel appearing for the appellants has confined the challenge to the impugned order on two fronts. First, it is submitted that the operative part of the order seeks to incorporate the directions issued in the case of Sri. Chandrashekaraiah (supra), which also includes a direction enabling the writ petitioners to file GST returns/ amended returns for the period after 01.07.2017 by calculating the differential tax in a manner as set out in the said order. Further, the interest, penalty and the period of limitation have also been waived. Second, it is submitted that the appellant No.1 is not liable to reimburse any amount to the writ petitioners, and the direction to the concerned respondents to do so must be read as confined to the Employer.
10. The dispute as to whether the writ petitioners would be entitled to reimbursement of incremental tax paid or payable by them on account of the levy of GST is strictly a matter between the writ petitioners and the Employers with whom they had entered into a contract. The contract between the writ petitioners and the employer would not alter the statutory scheme for the levy of GST. Thus, the liability of the writ petitioners to pay Goods and Services Tax (whether under the Central Goods and Services Tax Act, 2017, State Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act, 2017) is required to be determined strictly in accordance with the provisions of the relevant statute. The question of the levy of GST, assessment, recovery, and enforcement is a matter of statutory prescription.
11. In view of the above, no directions could be issued permitting the filing of any revised returns contrary to the provisions of the statute. The plenary directions to waive the penalty, interest under the GST Acts or the limitation for filing returns/revised returns are also unsustainable.”
6. In view of the subsequent decisions of the Coordinate Bench of this Court, we are of the considered opinion that the learned Single Judge based on Chandrashekaraiah (supra) could not have directed the concerned respondents therein to reimburse GST amount as indicated in the representation. At the best, the learned Single Judge could have directed to consider the representation in accordance with law.
7. In the light of the above, the following
O R D E R
i. The order of the learned Single Judge dated 26.03.2025 in W.P.No.569/2024 is hereby modified and the concerned authorities are hereby directed to consider the representations of respondent/petitioner at Annexures – C1 to C7 in accordance with law within a period of six weeks from the date of uploading of the present order.
Accordingly, the writ appeal stands disposed of.
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