Differential GST reimbursement under pre-GST contracts is a dispute between contractors and employers, not tax authorities.

The petitioner, a contractor, sought reimbursement of additional GST incurred on works contracts entered into before the GST regime, directions for calculation and payment of the differential tax, and a policy for such reimbursement.

He also sought to quash GST recovery proceedings and restrain coercive recovery.

The Court noted that the issue of GST differential reimbursement had been addressed in earlier decisions, including a Division Bench judgment modifying the directions in Chandrashekharaiah v. State of Karnataka.

The petitioner also referred to a notice under Section 79 of the KGST Act demanding ₹2,73,76,632 and sought liberty to make a representation under Section 79(1)(c)(iv).

1. Whether the petitioner’s claim for reimbursement of incremental GST on pre-GST works contracts should be determined by the tax authorities or by the contracting employers.

2. Whether the assessment and recovery proceedings should be quashed or stayed in this writ petition, and whether the petitioner could make a representation concerning the Section 79 notice.

The Court applied the principle stated by the Division Bench in Office of Principal Commissioner GST and Central Excise v. R. Chandrashekhar, W.A. No. 1587 of 2023 and connected matters, that GST liability, assessment, recovery and enforcement are governed by the applicable GST statutes, and that contractual claims for reimbursement of incremental tax are matters between contractors and their employers—not the tax authorities.

The Division Bench also held that courts cannot direct statutory departures, including revised returns contrary to the GST Acts or waiver of statutory interest, penalties or limitation.

The Court adopted the directions in Chandrashekharaiah v. State of Karnataka, W.P. No. 9721 of 2019, as retained after the Division Bench judgment: the relevant pre- and post-GST work and payments are to be considered, and contractors may submit representations for the employers’ consideration; the specified directions to tax authorities concerning returns and protection from precipitative action did not survive.

Under Section 79(1)(c)(iv) of the applicable GST Act, a party may seek amendment or revocation of a notice, or extension of time for payment, and the authority must consider any such representation in accordance with law.

The Court treated the reimbursement dispute as one between the petitioner and the employers under the contracts, while leaving statutory GST liability and recovery to the governing legislation.

It therefore disposed of the petition in accordance with the Division Bench ruling and the subsequent order in W.P. No. 100867 of 2026, rather than issuing directions to tax authorities inconsistent with those rulings.

As to the Section 79 notice, the Court did not determine its validity; it observed that the petitioner could make a representation under the statutory provision and that the authority should consider it according to law.

The Court did not quash or stay the assessment or recovery proceedings; it left the petitioner at liberty to challenge the assessment orders in appropriate proceedings, with the time spent prosecuting this petition to be excluded as stated in the referenced order.

The petitioner was also at liberty to make a representation under Section 79(1)(c)(iv), for consideration by the concerned authority in accordance with law.