Mandatory reimbursement of differential GST amounts by contracting authorities for works executed pre-GST, respecting established tax laws and prior contractual obligations.

ORDER :

M.NAGAPRASANNA, J.

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

i. Issue a writ or such other in the nature of certiorari to set aside/quash the original impugned order passed un/s 74A(1) r/w ss 74A(5)(i) of the KGST/CGST Act 2017, dated 08.08.2025, bearing the reference No. DCCT/AUDIT- 4/HBL/GST/2025-26/B- passed by respondent and produced as Annxure-D and

ii. Pass such other orders as this Hon’ble Court deems fit in the interest of justice and equity.

2. Heard the learned counsel for the petitioner.

3. The learned counsel for the petitioner submits that the issue in lis stands covered by the orders passed by the Co-ordinate Bench of this Court in Writ Petition No.28/2024 disposed on 16.09.2025 wherein the Co-ordinate Bench holds as follows:

The petitioner is before this court seeking the following prayers:

"a) Issue a writ or such other order in the nature of Mandamus directing the Respondents to refund the differential GST amount paid by the petitioners for the works executed by each of the petitioners respectively, as per the representations dated 02.08.2022, 16.06.2023, 17.06.2023, 20.09.2023 and 30.09.2023 etc., given by the petitioners - contractors to respective respondent - employers (as per the abstract Annexed) and produced at Annexure - B to B4.

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 or under old schedule of rates wherein GST is not paid by the Respondent - employers but is levied and paid by the petitioner - contractors 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 Shri D.R. Ravishankar, learned Senior counsel for Shri Naveen G.S., learned counsel appearing for the petitioner; Shri M. Rajakumar, learned Additional Government Advocate appearing for respondents No.1 and 2; Shri K.S. Naveen Kumar, learned counsel appearing for respondent No.3; Shri Anil Kumar B., learned counsel appearing for respondent No.4 and Shri G. Lakshmeesh Rao, learned counsel appearing for respondents No.6 and 8. 3. The issue in the lis is with regard to refund of GST. The controversy is, what schedule of rates is made applicable in the contracts entered into between the petitioner and the statutory departments.

4. The learned Senior counsel appearing for the petitioner submits that the contracts though were entered into at a later point in time i.e., after the regime of the GST, they were at the old scheduled rates under the KVAT regime, which is disputed by the respondents contending that the schedule of rates were changed in February-2018 and therefore, the contract was entered into after the change in schedule of rates, in some of the cases, at least.

5. The learned counsel appearing for the respondents would submit that the petitioner has no right to seek refund on the strength of what is projected before the court.

6. The learned Senior counsel would now submit that the co-ordinate bench has considered every argument of these respondents and has passed a detailed order. 7. The co-ordinate bench in WP.No.9721/2019 c/w others disposed on 11.04.2023 has held as follows:

“11. It is an undisputed fact that the Petitioners herein are class-I contractors who have entered into 'works contract with various State Govt agencies and that the agreements were entered into at a point of time when the KVAT Act and Finance Act 1994 were in force It is also not in dispute that the Petitioners are either covered under Composition scheme or regular VAT assessment and that on 01.07.2017 when the GST Act was implemented pan India, the sad works contract was treated as "deemed service" and the Petitioners became liable to pay GST. It is this differential tax