Karnataka HC Applies GST Transition Guidelines, Gives Taxpayer Four Weeks to Seek Contract-Tax Recalculation; Assessment Orders Remain Open to Challenge

The petitioner, a proprietor of a consultancy services business, challenged an appellate order dated 1 December 2025 and an adjudication order dated 16 December 2023 concerning GST.

He sought certiorari quashing both orders.

The petition was taken up for final disposal by consent, and the Court found the issue identical to that considered in an earlier decision concerning the GST transition and works contracts.

The Court acted under Articles 226 and 227 of the Constitution of India and applied the principles in Chandrashekharaiah v. State of Karnataka, as modified by the Division Bench in Office of Principal Commissioner GST and Central Excise v. R. Chandrashekhar S/o Ramaiah.

The Division Bench held that GST liability must be determined under the applicable GST statutes; contractual disputes over the incremental tax burden are between contractors and their employers, and directions cannot be issued to tax authorities to alter statutory requirements concerning tax, returns, penalty, interest, or limitation.

The directions in Chandrashekharaiah concerning calculation of pre- and post-GST work and consideration of representations by the relevant employers remained applicable, but directions concerning revised returns, waiver of penalty or interest, and limitation had been set aside.

Because the parties’ dispute was identical to the issue addressed in the cited coordinate-bench decision, and that decision had been modified by the Division Bench, the Court applied only the surviving directions: calculation of the relevant pre- and post-GST work and tax components, and consideration of the petitioner’s representation by the concerned employer.

The Court did not determine the validity of the challenged assessment orders on their merits; it expressly left the petitioner free to contest them in appropriate proceedings.

The petitioner may challenge the assessment orders in appropriate proceedings, and the authorities must exclude the time spent prosecuting this writ petition when considering such proceedings.

The Court did not quash the impugned orders or grant the requested substantive relief against them.