The High Court of Karnataka has issued a directive compelling government authorities to consider and pass appropriate orders on a civil contractor’s pending claim regarding Goods and Services Tax (GST) liabilities incurred on public road construction and infrastructure improvement contracts.
Justice Sachin Shankar Magadum observed that government authorities should analyse a civil contractor’s claim for payment of GST on road construction and improvement works by scrutinising the tender conditions, invoices, bills and payments to decide whether the GST component had already been paid. The Bench stated that:
“Merely keeping the representations pending without taking a decision thereon would leave the petitioner without an efficacious remedy in respect of the claim asserted by him”
Read Also: SC to Decide GST Applicability on Municipal Road Restoration Charges Paid by Utilities
The order was passed in a writ petition filed by Shri Jinaraj and Co., a Class-I civil contractor, seeking payment of GST claimed on works executed for government authorities.
The petitioner, a civil works contractor, was allotted multiple public road construction and infrastructure maintenance projects spanning FY 2018-19 through FY 2022-23.
The contractor submitted that while initial tender estimates accounted for pre-GST indirect tax levies, the subsequent imposition of GST at 12% on works contracts generated an unbudgeted tax burden on executed works, necessitating statutory tax reimbursement from the department.
Representations were filed to get payment of Rs 2.61 crore, Rs 25.18 lakh, and Rs 12.44 lakh towards GST for different works. Since the authorities did not determine the representations, the contractor approached the HC.
The claim was countered by the authorities, citing that the contractor had mentioned the rates inclusive of all taxes and duties and that the final bills had been scrutinised and paid after including the applicable GST. They claimed that the contractor could not raise other claims after the tendered and accepted rates.
The court said that the grievance of the contractor needs to be regarded by the competent authorities. It said that where GST is chargeable on a taxable service and the service provider raises an invoice along with the applicable GST, the service receiver should release the GST obligation as per the law.
Authorities need to report final bills including 12% GST if they maintain that, through a proper and intelligible breakup of the amounts paid under the respective bills, identifying the portion attributable to GST.
The bench said authorities must analyse the tender conditions, bills, invoices, payments already made, and the applicable GST liability while determining the contractor’s representations.
It asked the authorities to pass reasoned and speaking orders and communicate their decisions to the applicant within 6 weeks from the receipt date of a certified copy of the order.
Therefore, the HC partly permitted the writ petition.
| Case Title | Shri Jinaraj and Co Registered Partnership Firm vs. The Executive Engineer |
| Case No. | No. 103475 OF 2025 (T-RES) |
| For The Petitioner | Sri. Sangram S. Kulkarni |
| For the Respondent | Sri. Sharad V. Magadum |
| Karnataka High Court | Read Order |
