The court affirmed the applicability of prior tax assessment rules over new GST regulations for works contracts executed prior to GST implementation, ensuring equitable treatment for contractors regarding differential GST burdens.

ORDER :

M.Nagaprasanna, J.

1. The petitioner is before this court seeking the following prayer:

“(a) Issue a writ or such other order in the nature of Mandamus directing the Respondent No.2 and 3 to reimburse/pay the differential GST amount (being the difference between GST and VAT) by complying with the order of this Hon'ble Court in WP No. 9721/2019 and Other connected matters disposed on 11.04.2023, followed by the orders passed in WP No. 8489/2023, and WP No. 13167/2024 as per the representations dated 04.09.2023, 21.06.2024 and 01.10.2024 produced at ANNEXURE-D (colly);

(b) Issue a writ or such other order directing the Respondent No.1 State Govt, to issue a circular/policy to address the issue of payment of GST on works contract which are executed under VAT regime wherein, GST is not paid by the Respondents 2 and 3 but is levied and paid by the Petitioner to the GST department.

(c) Pass such other orders as may be deemed appropriate under the circumstances of the case, in the ends of justice.”

2. Heard Sri.Naveen G.S., learned counsel for the petitioner and Smt.Girija S. Hiremath, learned HCGP for respondent No.1 and Sri.Sunila S. Desai, learned counsel for respondent No.2.

3. Learned counsel appearing for the parties in unison would submit that, the issue in the lis stands covered by judgment rendered by Coordinate Bench of this Court in W.P. No.9721/2019 and connected matters disposed off on 11^th April, 2023. The Coordinate Bench of this Court held as follows:

“1. Since common questions of law and fact arise for consideration in all these petitions, they are taken up for consideration together and disposed of by this common order. Further, since identical relief's are sought for in the petitions, for the purpose of convenience, the relief's sought for in W.P.9721/2019 is reproduced as under;-

"(a) Declare that the provisions of GST Act is inapplicable in respect of works contract where 'provisions of service' are made prior to 1-7-2017 in so far as petitioners are concerned and consequently that the respondent Nos 4 to 8 have no jurisdiction to either issue notice or to take any coercive steps against the Petitioners under the provisions of the GST Act dated 1-7-2017 produced as Annexure-H;

(b) Declare that the provisions of Section 7 (3) read with clause 6 of Schedule II of the GST Act is ultra-vires Article 366 (12A), (26A) (29A) (b) & (1) the Constitution in view of and settled principles of law laid down by the Hon'ble Supreme Court regarding "works contract" and consequently that the respondent Nos. 4 to 8 have no jurisdiction to either issue notice or to take any coercive steps against the Petitioners under the provisions of the GST Act for 'works contract" entered into post 1-7-2017 Le. after the GST Act came into effect which is produced as Annexure H; and

(c) Direct the respondent No. 1 to consider the representations as per Annexure - C-1, Annexure-C-2 and Annexure-C-3 all dated 24-11-2018 in tandem with Annexures - D, E1 to E6; and

(d) Pass such other orders as may be deemed appropriate under the circumstances of the case, in the ends of justice."

2. The main issue involved in these petitions arises out of the grievance of the Petitioners that in view of the introduction of GST w.e.f 1-7-2017, the Petitioners who have earlier entered into "Works Contract" and had been assessed during the pre-GST regime either under the Composition scheme (COT scheme) or regular VAT assessment scheme (for short 'the VAT scheme') under the Karnataka Value Added Tax Act, 2003 (for short 'the KVAT Act') are required and made liable to pay additional tax by way of GST after 1- 7-2017, which is a huge differential tax burden not envisaged at the time of entering into agreements under the COT/KVAT schemes during the KVAT regime and as such, petitioners are before this Court by way of these petitions.

3. The Petitioners herein are class-l contractors who have entered into 'works contract with various State Govt agencies as employers and petition