Basayya Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
Summary: The Karnataka High Court allowed the writ petition filed by Basayya concerning adjustment of Goods and Services Tax (GST) following the introduction of the Central Goods and Services Tax Act, 2017 (CGST Act), in terms of specified directions earlier issued in Chandrashekharaiah Vs. State of Karnataka. The petitioner had, among other reliefs, sought a declaration concerning Section 7(3) read with Clause 6 of Schedule II of the GST Act, directions for reimbursement of differential GST allegedly paid by the petitioner in relation to works contracts, a policy or circular concerning GST on works contracts executed under the VAT regime or during the transition to GST, and quashing of an adjudication order bearing No. CTO/LGSTO-310/ORDER-74/50/2024-25/B-5464 dated 04.02.2025 for FY 2017-18 under Section 74(9) of the Act.
The parties jointly submitted that the issue concerned adjustment of GST consequent upon the coming into force of the CGST Act. They relied upon the earlier judgment of a Co-ordinate Bench in Chandrashekharaiah Vs. State of Karnataka, which had issued directions concerning works contracts spanning the pre-GST and post-GST periods. Those directions contemplated calculation of works executed before 01.07.2017 under the KVAT regime, assessment of payments received for such works under the applicable KVAT regime, determination of balance works completed or to be completed after 01.07.2017, calculation of applicable material and KVAT components, deduction of KVAT and applicable service tax, addition of applicable GST, determination and set-off of input credit where applicable, and separate calculation of the tax difference on balance works executed or to be executed after 01.07.2017.
