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2026 Supreme(Online)(AP) 20466
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
R Raghunandan Rao, T.C.D. Sekhar, JJ
M AKANDA NAIK – Appellant
Versus
THE ASSISTANT COMMISSIONER (STATE TAX) – Respondent
WRIT PETITION NO: 11757/2026
For the Appellants/Petitioners: Modapothula Sumalatha
For the Respondents: GP for Irri and CAD, GP for Commercial Tax
Where a tax assessment for government works contracts is affirmed, the government entity may be directed to pay the differential tax amount to the contractor to facilitate the payment of such tax to the Commercial Tax Department.
Headnote:The petitioner challenged an order in Form GST DRC-07 dated 20.03.2025 issued under S.73 of the APGST Act, 2017, which imposed GST at 18% on works contracts executed for a government entity. The petitioner contended that this was contrary to Notification no. 11/2017-Central Tax (Rate) as amended by Notification no. 20/2017-Central Tax (Rate). The court noted that the issue had been previously decided in W.P.No.22663 of 2023. The primary issue was whether the tax rate of 18% was applicable to government works contracts and the liability for the differential tax. Following the precedent set in W.P.No.22663 of 2023, the court reasoned that while the assessment order should be affirmed, the government entity should bear the differential tax burden to enable the contractor to remit the tax to the department. the Writ Petition is disposed of, affirming the order of assessment. However, there shall also be a direction to respondent No.5 to pay the differential amount of tax for the assessment period, covered under the impugned assessment order to the petitioner to enable the said petitioner to pass on the said tax to the Commercial Tax Department.
Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ of mandamus or any other appropriate writ or direction declaring that the impugned Order in Form GST DRC-07, vide REFERENCE NO. ZD3703250295188, dated 20.03.2025, passed by the Respondent for the Tax Period 2023-24 under Section 73 of APGST Act, 2017 , imposing GST @ 18PERCENT on the Works Contracts (Government Works) executed by the Petitioner for Respondent No. 5 which is Government Entity, is contrary SI.No. 3 (vi) of the Notification no. 11/2017-Central Tax (Rate), dated 28.06.2017 as amended by Notification no. 20/2017- Central Tax (Rate), dated 22.08.2017, is without jurisdiction, contrary to law and illegal and consequently set aside the same or alternatively in case it is held that the rate of tax @ 18PERCENT is correct, direct the Respondent No. 5 to pay the differential tax @ 6 PERCENT along with interest and penalty of Rs. 1,64,034/- out of Rs.3,22,914/- in respect of works executed either to the Petitioner to enable it to pay to the Department or directly to the Department to the Account of the Petitioner and further direct the Respondent No. 5 to pay the differential tax @ 6PERCENT along with interest and penalty of Rs.1,64,034/- out of Rs.3,22,914/- for the works executed w.e.f. 01.01.2022 to the Petitioner so as to enable the Petitioner to pay the same to the Department or to pay the same directly to the Department to the account of the Petitioner and pass
IA NO: 1 OF 2026
Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings, including recovery of the tax @ 18% along with interest and penalty of Rs.3,22,914/- , pursuant to the impugned Order in Form GST DRC-07, vide REFERENCE NO. ZD3703250295188, dated 20.03.2025, passed by the Respondent for the Tax Period 2023-24 under Section 73 of APGST Act, 2017 , and pass
The Court made the following order:
(per Hon’ble Sri Justice R Raghunandan Rao)
The issue raised in the present writ petition has been decided by this Court, by an order, dated 24.07.2024 in W.P.No.22663 of 2023.
Following the said judgment, the Writ Petition is disposed of, affirming the order of assessment. However, there shall also be a direction to respondent No.5 to pay the differential amount of tax for the assessment period, covered under the impugned assessment order to the petitioner to enable the said petitioner to pass on the said tax to the Commercial Tax Department. The said payment shall be cleared within a period of two (2) months from the date of receipt of this order.
Needless to say, if any interest is recoverable from the petitioner, for late payment, the same would also have to be borne by respondent No.5. No costs.
As a sequel, pending miscellaneous applications, if any, shall stand closed.
