State of Karnataka Department of Finance v. Unique Constructions
The ruling in brief
The State of Karnataka filed Writ Appeal No. 615 of 2025 before the Division Bench of the Karnataka High Court, decided 10 June 2026, against a single-judge order directing reimbursement of differential GST to contractors including Unique Constructions. Contractors executed government works contracts priced inclusive of pre-GST taxes but sought pass-through of GST levied after 1 July 2017 on balance work. The appellate Court held reimbursement is strictly contractual between employer and contractor; section 9 CGST liability cannot be modified by writ directions waiving interest, penalty, limitation, or mandating revised returns before tax authorities. Directions binding GST authorities were set aside while employer-only reimbursement directions were clarified. Appeal largely favoured the revenue. Important for government contractor billing post-GST. Not legal advice.
For information only — not legal advice. Read the full judgment and applicable law before relying on this summary.
Provisions considered
- CGST S.9 — Levy of CGST; includes reverse-charge liability in notified cases.
Source documents
Similar rulings
In favour of the revenue
State of Karnataka v. Yogisha R
In Writ Appeal No. 1951 of 2025, the Karnataka High Court decided on 25 June 2026 whether writ courts may direct GST authorities to reimburse tax on state works contracts. Contractor Yogisha R had sought directions against the department of finance and tax officers. The Court reaffirmed that GST officers cannot be compelled to reimburse incremental tax; any pass-through claim arises only under the works contract with the government employer. Section 9 of the CGST Act governs levy, assessment, and recovery independently of tender language. Proper writ relief is to direct the employer department to consider representations for contractual reimbursement, not to bind GST administration. Appeal favoured the revenue on separation of remedies. This summary is not legal advice. Readers should consult the full judgment and current notifications before advising clients on compliance steps.
In favour of the revenue
S.K. Swamy and Company, In re
S.K. Swamy and Company, a registered Karnataka partnership, sought an advance ruling (Order KAR.ADRG/42/2026, 29 July 2026) on whether its activity of supplying ballast and loading it into Railway wagons using JCB loaders constituted a works contract under GST. The Karnataka AAR (Members Rama Rao and Itagi) found no building, construction, erection, or work connected with immovable property; the engagement was essentially supply and loading of goods for rail transport. Accordingly the arrangement could not be classified as a works contract under the statutory definition in Section 2 CGST, with implications for tax treatment under Sections 8 and 9. Outcome favoured revenue’s view that works-contract classification was unavailable. Contractors performing similar loading-only services should analyse immovable-property nexus separately; this summary is not legal advice.
In favour of the assessee
Green Valley Sumo Taxi Stand Union Srinagar Dood Ganga v. Union Territory of J And K
Green Valley Sumo Taxi Stand Union Srinagar Dood Ganga filed WP(C) No. 1016 of 2023 before the High Court of Jammu & Kashmir and Ladakh; order 18 September 2026. The union operated taxi stands on public land under temporary allotment and paid rent to the administration. Respondents demanded GST on rental periods including years before GST came into force on 8 July 2017. The court held tax could not be levied retrospectively for pre-implementation rent; liability attached only from 8 July 2017 onward under Sections 1 and 9 read with transitional Section 174. Outcome: in favour of the assessee for the pre-GST period. Relevant for government lease and land-allotment cases. Editorial summary; not legal advice. Dues for post-July 2017 rent remain payable with GST where applicable, separating valid current liability from invalid back demands.
In favour of the assessee
Goutam Engineering Concern v. West Bengal State Electricity Distribution Company Ltd
Goutam Engineering Concern filed WPA No. 5150 of 2022 before the Calcutta High Court; judgment 14 September 2026. It performed electrical line repair and maintenance for West Bengal State Electricity Distribution Company Ltd., completing the work in 2015 before GST commenced. Billing and approval occurred in 2019; WBSEDCL withheld payment insisting on GST registration and tax invoices. The issue was the date of supply and whether completed pre-GST services could be taxed under CGST. The court held subsequent billing could not pull finished 2015 services into GST; withholding was wrongful. Payment was directed with interest, subject to deduction of any tax under the pre-GST regime. Outcome: assessee favoured. Sections 9 and 142 cited. Not legal advice. Government contractors should document completion dates and pre-GST invoices to resist post-facto GST demands on old works.
See the decision
Bhartiya Caterers and Enterprises v. State Bank of India
Bhartiya Caterers and Enterprises filed before the Chhattisgarh High Court (WPC 4234/2026, 14 August 2026) against State Bank of India after its meal-supply tender bid was rejected despite quoting identical rates to another bidder, amid GST ambiguity on the contract. CGST Section 9 and Articles 226 and 14 were invoked. Post-bid offers and delay or unpaid-dues allegations did not establish illegality, arbitrariness or breach of tender terms. Judicial review under Article 226 ensures fair process, not merits revision or contract re-writing. The writ was dismissed on limited constitutional review grounds without examining whether GST inclusion affected rate comparability. Outcome: no relief on tender merits. GST practitioners advising on government tenders should separate tax clarification disputes from Article 226 challenges unless procedural unfairness is clearly shown.