M/S AADI SHAKTHI ENTERPRISES vs THE STATE OF KARNATAKA

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IN THE HIGH COURT OF KARNATAKA AT DHARWAD


TH
DATED THIS THE 6 DAY OF NOVEMBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE T.M.NADAF

WRIT PETITION NO. 103322 OF 2026 (T-RES)

BETWEEN:

M/S. AADI SHAKTHI ENTERPRISES,
(PROPRIETORSHIP CONCERN)
DOOR NO.1/2, BHUVANAHALLI, ANJANEYA COLONY,
GADIGANUAR POST, HOSPETE,
BALLARI (BALLARY)-588223,
(REPRESENTED BY ITS PROPRIETOR,
SRI. VINY KUMAR MISHRA)

…PETITIONER

(BY SRI. PAVAN LINGASUR, ADVOCATE)

AND:

1. THE STATE OF KARNATAKA,
REPRESENTED BY THE PRINCIPAL SECRETARY,
FINANCE DEPARTMENT, GOVERNMENT OF
KARNATAKA, AMBEDKAR VEEDHI, BENGALURU-
560001.










Digitally signed by
THEJAS KUMAR N
Location: High
Court of
Karnataka,
Dharwad Bench

2. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-1,
II CROSS, NEHRU COLONY,
HOSAPETE-583203.
…RESPONDENTS

(BY SRI. SHARAD V.MAGADUM, AGA)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A)
ISSUE A WRIT OF CERTIORARI OR WRIT IN THE NATURE OF
CERTIORARI QUASHING THE IMPUGNED ADJUDICATION
ORDER PASSED UNDER SECTION 73 OF THE CGST/KGST ACT,
BEARING SL. NO. ACCT(AUDIT)-1/HPT/GST-
ADJN/ORDER/2023-24/T-393 DATED 19/12/2023 MARKED AS
ANNEXURE-D FOR THE PERIOD 2017-18 IN SO FOR AS THE
PETITIONER IS CONCERNED. B) ISSUE A WRIT OF CERTIORARI
OR WRIT IN THE NATURE OF CERTIORARI QUASHING THE
IMPUGNED ADJUDICATION ORDER PASSED U/S 73 OF THE
CGST/KGST ACT, BEARING SL. NO.ACCT(AUDIT) 1/HPT/GST-
ADJN/ORDER/2023-24/T- DATED 30/03/2024 MARKED AS
ANNEXURE-E FOR THE PERIOD 2018-19 IN SO FOR AS THE
PETITIONER IS CONCERNED. C) ISSUE A WRIT OF CERTIORARI
OR WRIT IN THE NATURE OF CERTIORARI QUASHING THE
DEMAND IN GSTR-DRC 07 ISSUED BY RESP-2 DATED
16/04/2024 MARKED AT ANNEXURE-F FOR THE PERIOD 2018-
19 BEARING REFERENCE NO ZD290424038353E IN SO FOR AS
THE PETITIONER IS CONCERNED. D) ISSUE A WRIT OF
CERTIORARI OR WRIT IN THE NATURE OF CERTIORARI
QUASHING THE RECOVERY DEMAN DEMAND IN GSTR-DRC 13
ISSUED BY RESP-2 DATED 06/02/2026 MARKED AT
ANNEXURE-G FOR THE PERIOD 2017-18 BEARING REFERENCE
NO. ACCT (AUDIT-1)/HPT/2025-26/T/NO-346 FOR THE PERIOD
2017-18 IN SO FAR AS THE PETITIONER IS CONCERNED. E)
DECLARE THAT THE TURNOVER REFLECTED IN THE FORM 26AS
INCLUDES THE PRE-GST TURNOVER NOT LIVEABLE FOR
COLLECTION OF TAX UNDER GST ACT. F) ISSUE ANY OTHER
WRIT OR DIRECTION THAT MAY BE DEEMED FIT IN THE FACTS
AND CIRCUMSTANCES OF THE INSTANT CASE IN THE
INTERESTS OF JUSTICE. INCLUDING THE COST OF THE WRIT
PETITION.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:

CORAM: HON'BLE MR. JUSTICE T.M.NADAF

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ORAL ORDER
This Writ Petition is filed seeking following reliefs:
“a) Issue a writ of certiorari or writ in the nature of
Certiorari Quashing the impugned adjudication Order
passed u/s 73 of the CGST/KGST Act, bearing Sl. No.
ACCT(Audit)-1/HPT/GST-ADJN/ORDER/2023-
24/T-393 dated 19/12/2023 marked as ANNEXURE-
D for the period 2017-18 in so for as the petitioner is
concerned.
b) Issue a writ of certiorari or writ in the nature of
Certiorari Quashing the impugned adjudication order
passed u/s 73 of the CGST/KGST Act, bearing Sl.
No. ACCT(Audit)-1/HPT/GST-ADJN/ORDER/
2023-24/T- dated 30/03/2024 marked as
ANNEXURE-E for the period 2018-19 in so for as the
petitioner is concerned.
c) Issue a writ of certiorari or writ in the nature of
Certiorari Quashing the demand in GSTR-DRC 07
issued by resp-2 dated 16/04/2024 marked at
ANNEXURE-F for the period 2018-19 bearing
reference No ZD290424038353E in so for as the
petitioner is concerned.
d) Issue a writ of certiorari or writ in the nature of
Certiorari Quashing the recovery demand in GSTR-
DRC 13 issued by resp-2 dated 06/02/2026 marked at
ANNEXURE-G for the period 2017-18 bearing
reference No. ACCT (AUDIT-1)/HPT/2025-
26/T/No-346 for the period 2017-18 in so far as the
petitioner is concerned.
e) Declare that the Turnover reflected in the Form 26AS
includes the Pre-GST Turnover not liveable for
collection of tax under GST Act.
f) Issue any other writ or direction that may be deemed
fit in the facts and circumstances of the instant case in
the interests of justice. Including the cost of the Writ

Petition.”

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2. Heard, Sri Pavan Lingasur, learned counsel
appearing for the petitioner and Sri Sharad V.
Magadum, learned AGA appearing for respondents.

3. Learned counsel for the petitioner submits
that order in original passed issuing GST/DRC-01 for
the assessment year 2018-19 on 20.12.2023 followed
by adjudication order dated 30.03.2024 under Section
73(9) of the CGST/KGST Act, 2017.

4. The main contention of learned counsel Sri
Pavan Lingasur is that there are several transactions
entered pre GST and post GST. He submits that the
Co-ordinate Bench of this Court in W.P.No.
100867/2026 connected with other petitions disposed
of on 15.07.2026 considered identical matter and
passed the following order:
“The W.P.No.100867/2026 is filed seeking for the
following reliefs:
“WHEREFORE, in the light of the above
facts and grounds, the Petitioner humbly
prays that this Hon'ble Court may be pleased
to:

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A. Issue a Writ of Mandamus directing the
Respondents to consider and dispose of the
Petitioner's representations in terms of the
judgment dated 11.04.2023 passed by this
Hon'ble Court in Sri Chandrashekharaiah v.
State of Karnataka (Annexure K), in a time
bound manner and consequently compute
and pay the differential GST along with
interest and penalty payable in respect of
the works executed by the Petitioner.

B. Issue a Writ of Mandamus directing the
Respondents to execute an appropriate
supplementary agreement incorporating the
applicable GST rate component as is set out
in the Revision Notification which amended
Notification No. 11/2017-Central Tax (Rate),
Dated 28-6-2017 (Annexure B) while also
accounting for the interest and penalty
imposed on the Petitioner under the
Adjudication Order - DRC 07 Ref No:
ZD2910251137560 dated 30.10.2025 by the
Respondent No.1 (digitally signed version is
produced as Annexure J); and

C. Grant such other order or direction as
this Hon'ble Court may deem fit in the
interest of justice and equity.”



2. The W.P.No.100887/2026 is filed seeking for
the following reliefs:

“WHEREFORE, in the light of the above
facts and grounds, the Petitioner humbly
prays that this Hon'ble Court may be pleased
to:

A. Issue a Writ of Mandamus directing the
Respondents to consider and dispose of the
Petitioner's representations in terms of the
judgment dated 11.04.2023 passed by this
Hon'ble Court in Sri Chandrashekharaiah v.
State of Karnataka (Annexure K), in a time

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bound manner and consequently compute
and pay the differential GST along with
interest and penalty payable in respect of
the works executed by the Petitioner.

B. Issue a Writ of Mandamus directing the
Respondents to execute an appropriate
supplementary agreement incorporating the
applicable GST rate component as is set out
in the Revision Notification (Annexure F)
which amended Notification No. 11/2017-
Central Tax (Rate), Dated 28-6-2017
(Annexure B) while also accounting for the
interest and penalty imposed on the
Petitioner under the Adjudication Order -
DRC 07 Ref No: ZD291025115172T dated
30.10.2025 by the Respondent No.1
(digitally signed version is produced as
Annexure J); and

C. Grant such other order or direction as
this Hon'ble Court may deem fit in the
interest of justice and equity.”



3. It is jointly submitted by the learned counsel
for the petitioner and the learned AGA that the question
that arises for consideration in the present writ petitions
is with regard to the adjustment of Goods and Service
Tax [GST] consequent to coming into force of the Central
Goods and Service Taxes Act, 2017 [CGST Act] . It is
further submitted that a Co-ordinate Bench of this Court
in the case of Chandrashekharaiah Vs. State of
1
Karnataka has disposed of the writ petitions by issuing
various guidelines. The operative portion of the said order
is as under:
“ORDER
(i) Petitions are hereby disposed of.

(ii) The Respondents-State and other Govt
agencies/Respondents who have entered
into works contract with the Petitioners are

1
Order dated 11.04.2023 in W.P.No.9721/2019

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issued the following directions/guidelines:-

(a) Calculate the works executed pre-GST
(prior to 1-7-2017) under KVAT regime and
payments received by the Petitioners.

(b) The payments received by the Petitioners
pre-GST for such of the works executed
before 1-7-2017 are to be assessed under
KVAT tax regime - either under COT or VAT
scheme as applicable.

(c) Calculate the balance works to be
completed or completed after 1-7-2017, in
the original contract.

(d) Derive the rate of materials, KVAT items
required or used to complete the balance
works.

(e) Deduct the "KVAT" amount from those
materials and the service tax, if applicable.

(f) Add the applicable "GST" on those items.

(g) Input Credit on the materials is to be
arrived at and be set off as against the
output GST, for those assessed under
regular VAT.

(h) Further, the "tax difference" should be
calculated on such balance works executed
or to be executed after 1-7-2017 separately.

(i) Based on the result obtained on
calculation of the tax difference on the
contract value, concerned
department/authority has to decide whether
agreement needs to be changed or not.

(j) A supplementary agreement may be
signed with the Petitioners for the revised
GST-inclusive work value for the Balance
Work completed or to be completed as

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determined above and in case the revised
GST-inclusive work value for the Balance
Work, completed or to be completed after 1-
7-2017, is more than the original agreement
work value, the Petitioners are to be
paid/reimbursed, as the case may be, the
differential tax amount by the concerned
employer; so also, in case payments for
works completed pre-GST are made post-
GST, the concerned employer has to pay or
reimburse, as the case may be, the
differential tax amount, to the Petitioners.

(iii) Petitioners are directed to submit
comprehensive representations to the
respective employers/Respondents within a
period of 4 weeks from the date of receipt of
a copy of this order,
irrespective of whether they have completed
the works pre-GST or post-GST or payments
were received or yet to be received post-
GST.

(iv) If such representations are submitted,
the respective employers/Respondents are
directed to consider and dispose of the same
in the light of the aforesaid
directions/guidelines as expeditiously as
possible and at any rate within a period of 8
weeks from the date of submission of the
representations.

(v) In view of the interim orders passed by
this Court in the present petitions, such of
the petitioners who had not filed their GST
returns during the period after 1-7-2017 are
permitted to file their returns/amended
returns, pursuant to the calculation of the
differential tax as per procedure above under
GST regime, without insisting on interest or
penalty or limitation.

(vi) The GST authorities are also directed not
to take precipitative action against the

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Petitioners for a period of 6 months from the
date of receipt of a copy of this order.

(vii) Liberty is reserved in favour of the
petitioners to challenge any order/decision
passed/taken by the respondents or the
authorities, subsequent to this order and
also take recourse to such remedies as
available in law.”


4. It is further jointly submitted that the
judgment of the Co-ordinate Bench of the Court in the
1
case of Chandrasekharaiah was the subject matter of
challenge before the Division Bench of this Court in the
case of Office of Principal Commissioner GST and
Central Excise and others Vs R Chandrashekhar
2
S/o. Ramaiah . The Division Bench has partly allowed
the said appeals. The operative portion of the order of the
Division Bench is as under:
“8. The dispute as to whether the writ
petitioners would be entitled to
reimbursement of the incremental tax paid
or payable by them on account of the levy of
GST is strictly a matter between the writ
petitioners and the Employers with whom
they had entered into the contracts. The
contracts between the writ petitioners and
the Employers would not alter the statutory
scheme for the levy of GST. Thus, the
liability of the writ petitioners to pay Goods
and Services Tax (whether under the Central
Goods and Services Tax Act, 2017, the
State Goods and Services Tax Act, 2017
or the Integrated Goods and Services Tax
Act, 2017) is required to be determined
strictly in accordance with the provisions of
the relevant statute. The question of the
levy of GST, assessment, recovery, and
enforcement is a matter of statutory

2
Judgment dated 10.06.2026 in W.P.No.1587/2023 C/w W.A.No.1599/
2023, W.A.No.1638/2023, W.A.No.1647/2023 & W.A.No.25/2024 : NC:2026
KHC:28975-DB

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prescription.

9. In view of the above, no directions could
be issued permitting the filing of any revised
returns contrary to the provisions of the
statute. The plenary directions to waive the
penalty, interest under the GST Acts or the
limitation for filing returns/revised returns
are also unsustainable.
10. The controversy as to the incremental
tax burden arising on account of the change
in the tax regime is, in essence, one
between the writ petitioners and the
Employers. In the context of such a dispute,
no directions could be issued to the tax
authorities regarding the levy, assessment,
and collection of tax, penalty, or interest.

11. In the aforesaid view, the direction
issued to the respondents to reimburse the
differential tax is required to be construed as
a direction only to the concerned Employers
and not to the tax authorities.

12. Accordingly, the impugned order, to the
extent it issues directions to the tax
authorities, is set aside. The appeal is
disposed of in the aforesaid terms.”

5. In view of the judgment of the Division
Bench, as referred above, the operative direction Nos.(v)
1
and (vi) as ordered in case of Chandrashekharaiah
have been set aside.

6. In view of the aforementioned, the present
writ petitions are allowed in terms of the operative
direction Nos.(i), (ii)(a) to (ii)(f), (iii), (iv) and (vii) as
1
held in the case of Chandrashekharaiah as noted
above.

7. Since the petitioner has also impugned the
assessment orders in the present writ petitions, the
petitioner is at liberty to assail the same in appropriate

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proceedings. The concerned authorities shall not take into
account time period spent by the petitioner in prosecuting
the present petitions.

8. In view of disposal of the writ petitions,
pending interlocutory applications, if any, do not survive
for consideration and are disposed of.”



5. Further, he submits that with the said benefits the
petitioner be reserved with liberty to file appeal under
Section 107 of the Act.

6. In view of order, by the co-ordinate bench of this
court, extending the benefit stated supra , the petitioner is
reserved with liberty to file appeal as per Section 107 of the
Act, authorities to consider the appeal in accordance with law
and subject to all limitation as per Section 107 of the Act and
pass the order, if the appeal is filed within 2 weeks from
today and consider the same within 4 weeks from today.

7. With the above observation, this petition is
disposed of.


Sd/-
(T.M.NADAF)
JUDGE
RKM,CKK
CT: UDM
List No.: 1 Sl No.: 81