Anil Annasaheb Patil Vs Executive Engineer PWD (Karnataka High Court)
Summary: The Karnataka High Court at Dharwad considered a writ petition filed by M/s. Anil Annasaheb Patil, a Class-I Government Contractor, seeking a mandamus directing the Executive Engineer, PWD, Chikkodi Division, Belagavi, to reimburse the differential Goods and Services Tax (GST) amount of Rs.5,68,578.33 with interest at 18% per annum. The claim arose from the petitioner’s construction work relating to the “Court Complex building at Mudalgi”. The petitioner stated that GST came into force from 01.07.2017 during the currency of the contract, replacing the earlier VAT regime, resulting in an additional tax liability which had been discharged by the petitioner.
The petitioner relied upon a representation dated 19.11.2025 seeking reimbursement. The grievance before the Court was that despite payment of the differential GST liability to the competent authority, the respondents had not reimbursed the amount.
The Court noted that the controversy concerning liability for differential tax arising from introduction of GST was no longer res integra. It referred to the decision in W.P.No.104908/2023, disposed of on 29.08.2023, wherein the Court had held that the recipient of works contract service was liable to bear the differential tax liability arising from introduction of GST and that the State, its instrumentalities and Departments were under an obligation to reimburse the differential GST amount payable by the contractor.
The Court found that the petitioner had already discharged the differential GST liability. Since the respondents were beneficiaries of the work executed by the petitioner and the issue had been consistently dealt with by the Court in favour of reimbursement, the petitioner was held to have acquired a corresponding legal right to seek reimbursement. The Court therefore concluded that the respondents were under a bounden duty to reimburse the differential GST amount and that a case for issuance of a writ of mandamus had been made out.
The writ petition was accordingly allowed. The respondents were directed to consider the petitioner’s representation dated 19.11.2025 and determine the differential GST amount payable in accordance with law. Upon such determination, the amount was to be reimbursed within six weeks from receipt of a certified copy of the order, provided the representation had not already been decided.
The Court expressly limited the reimbursement to the differential tax liability attributable to introduction of the GST regime. The reimbursement was also made subject to verification of records and calculations in accordance with law. Thus, while the petitioner succeeded in securing a direction for consideration and reimbursement, the precise amount remained subject to departmental determination and verification.
The writ jurisdiction invoked by the petitioner was under Article 226 of the Constitution of India.
Cases Discussed
- M.G. Arunkumar Vs. The State of Karnataka and Another, W.P.No.104908/2023, dated 29.08.2023 — the decision was relied upon as an identical matter in which reimbursement of GST to a contractor was directed.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner is seeking mandamus directing the respondents to reimburse the differential Goods and Services Tax (for short ‘GST’) amount of Rs.5,68,578.33 with interest at the rate of 18% per annum from the date of remittance till realization in terms of representation dated 19.11.2025 as per Annexure-F.
2. Heard learned counsel for the petitioner and learned Additional Government Advocate appearing for respondents-State. Perused the records.
3. The petitioner, a Class-I Government Contractor, was entrusted with the construction work of “Court Complex building at Mudalgi”. It is the specific case of the petitioner that during the currency of the contract, the Goods and Services Tax (GST) regime came into force with effect from 01.07.2017, replacing the earlier Value Added Tax (VAT) regime. Consequent upon such introduction of GST, the petitioner was required to bear additional tax liability and, therefore, claims reimbursement of the differential tax amount from the respondents-State.
4. The controversy relating to liability to bear the differential tax consequent upon introduction of GST is no longer res integra. In an identical matter in W.P.No.104908/2023, disposed of on 29.08.2023, this Court has held that the recipient of the works contract service is liable to bear the differential tax liability arising on account of introduction of GST. This Court has further held that the State, its instrumentalities and Departments are under an obligation to reimburse the differential GST amount payable by the contractor.
5. In the present case, the petitioner has already discharged the differential GST liability before the competent authority. Alleging inaction on the part of the respondents in reimbursing the said amount, the present writ petition is instituted. In view of the consistent line of decisions rendered by this Court on the issue, the petitioner has acquired a corresponding legal right to seek reimbursement of the differential GST amount. The respondents, being beneficiaries of the work executed by the petitioner and in view of the law laid down by this Court, are under a bounden duty to reimburse the differential GST amount. Therefore, this Court is of the view that the petitioner has made out a case for issuance of a writ of mandamus.
6. For the foregoing reasons, this Court proceeds to pass the following:
ORDER
(i) The writ petition is allowed.
(ii) The respondents are directed to consider the representation dated 19.11.2025 (Annexure–F) and determine the differential GST amount payable to the petitioner in accordance with law.
(iii) Upon such determination, the respondents shall reimburse the differential GST amount to the petitioner within a period of six weeks from the date of receipt of a certified copy of this order, if the representation of the petitioner is not decided as on today.
(iv) It is made clear that the reimbursement shall be confined only to the differential tax liability attributable to the introduction of the GST regime and shall be subject to verification of records and calculations in accordance with law.
