Facts of the Case: The petitioner, Prabhakar S/o Rajendra Rao Kulkarni, a Class-I contractor from Bagalkot, filed eight connected writ petitions (WP Nos. 109381, 109370, 109372, 109382, 109386, 109390, 109392 and 109408 of 2025) against the Bagalkot Town Development Authority (BTDA) and Karnataka Neeravari Nigam Limited (KNNL), the two government agencies for whom he had executed works contracts entered into during the pre-GST era under the Karnataka Value Added Tax Act, 2003 regime. With GST replacing VAT from 1.7.2017 and works contracts being treated as "deemed service" attracting 18%/12% GST, the petitioner sought mandamus directions in each petition for payment of the resulting differential tax, with amounts ranging from Rs.5,00,415.72 to Rs.21,61,395.84 across the eight matters, together with 18% per annum interest from the date of payment till realisation.

Issues Involved:

  1. Whether contractors who executed works contracts for State government agencies (BTDA and KNNL) under the pre-GST KVAT regime are entitled, across multiple contracts, to be reimbursed the differential tax burden triggered by the transition to GST.

Petitioner's Arguments:

  • The KVAT-to-GST transition imposed an unforeseen, heavy additional tax burden across all eight contracts, not contemplated when contract rates were originally fixed.
  • State Government circulars dated 3.1.2020 and 14.12.2020 prescribed the methodology for computing the differential tax and directed its absorption by the contracting department.
  • Parity with other states and Indian Railways, which had schemes absorbing this differential burden, was invoked.
  • Relied on MAS Constructions v. Hubballi Dharwad Smart City Ltd. and connected precedents.

Respondent's Arguments:

  • Counsel for both BTDA and KNNL appeared but, in unison with the petitioner, submitted that the issue in each of the eight petitions stood covered by the earlier coordinate bench ruling, without pressing independent opposition in this proceeding.

Court Order / Findings:

  • The Court held that the controversy across all eight connected petitions was directly covered by the Coordinate Bench judgment in W.P. No.9721/2019 and connected matters (11.4.2023), which had earlier addressed the identical grievance for a class of works contractors.
  • All eight petitions were disposed of "on all its fours and on the same reasons" as the coordinate bench ruling, directing BTDA and KNNL to compute and pay the differential GST amounts claimed.

Important Clarification:

  • The principle that the differential GST burden on pre-GST works contracts must be absorbed by the contracting government agency, computed per the State's own circulars dated 3.1.2020 and 14.12.2020, applies uniformly across multiple contracts and multiple government counterparties of the same contractor, and is not confined to a single agency or a single contract.

Sections Involved:

  • Section 7(3) read with Schedule II Clause 6, Central Goods and Services Tax Act, 2017 — treatment of works contract as a deemed service.
  • Section 15, Karnataka Value Added Tax Act, 2003 — composition scheme applicable to works contractors pre-GST.
  • Articles 226 and 227 of the Constitution of India — writ jurisdiction invoked for the mandamus.

Decision – In Favour of: Assessee/Petitioner-Contractor, across all eight connected petitions.

Related Case Laws: This batch should be read with the same petitioner's separate petition against BTDA in Prabhakar Kulkarni vs Bagalkot Town Development Authority (WP No. 109550 of 2025), decided the same day on identical reasoning, and the underlying coordinate bench ruling in W.P. No. 9721/2019 and connected matters (11.4.2023).

Case Details: High Court of Karnataka, Dharwad Bench | WP No. 109381 of 2025 (GM-RES) with connected WP Nos. 109370, 109372, 109382, 109386, 109390, 109392 and 109408 of 2025 | NC: 2025:KHC-D:18210 | Coram: Hon'ble Mr. Justice M. Nagaprasanna | Date of Order: 15.12.2025.

Link to Download the Order: View/Download the Order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.