ER. Roland S. Vs Government of Karnataka (Karnataka High Court)
Summary: The petitioner, a Class-I Registered Civil Contractor, approached the Karnataka High Court seeking a writ of mandamus directing the respondents to reimburse differential Goods and Services Tax (GST) of Rs.9,90,823/- with interest at 18% per annum from the date of remittance till realization, in terms of the representation dated 13.04.2026 at Annexure-B.
The petitioner had been entrusted with the work of construction of Class Three Government Servant Quarters at Kaikini Road Premises at Karwar in Karwar Taluk, Uttara Kannada District. During the subsistence of the contract, the GST regime came into force with effect from 01.07.2017, replacing the earlier Value Added Tax (VAT) regime. The petitioner claimed that the introduction of GST resulted in an additional tax liability which he was required to bear and that the differential tax amount was therefore liable to be reimbursed by the State respondents.
The petitioner submitted that he had already discharged the differential GST liability before the competent authority and instituted the writ petition alleging inaction by the respondents in reimbursing the amount.
The Karnataka High Court noted that the controversy concerning liability to bear differential tax following introduction of GST was no longer res integra. The Court referred to its decision in W.P.No.104908/2023, disposed of on 29.08.2023, wherein it 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.
