Government Contractors case laws

State of Karnataka v. Yogisha R

In favour of the revenue

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.

State of Karnataka Department of Finance v. Unique Constructions

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.