Statutory GST liability prevails over contract terms, while differential tax reimbursement remains a matter between contractor and employer.

Contractual terms between a contractor and a government employer cannot alter the contractor's statutory GST liability, which remains governed by the applicable GST enactments. Revised or amended returns, waiver of interest or penalties, and relaxation of statutory filing limitations cannot be permitted without statutory authority; directions allowing such departures are unsustainable. Any claim for reimbursement of differential GST arises from the contractual relationship with the government employer and may operate only against that employer under the contract and applicable law. Tax authorities and the State in their taxing capacity are not liable to reimburse the differential tax.

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Issues: (i) Whether the contractual arrangement between the contractor and the government employer could alter the contractor's statutory liability to pay GST; (ii) whether directions permitting revised GST returns, waiving interest and penalty, or relaxing statutory limitation could be issued contrary to the GST enactments; (iii) whether reimbursement of differential GST could be directed against the tax authorities or the concerned government employer.

Issue (i): Whether the contractual arrangement could alter the contractor's statutory GST liability.

Analysis: Liability to levy, assessment, recovery and enforcement of GST is governed by the applicable GST statutes. The works contracts and any alleged failure by the government employer to reimburse the differential tax could not modify the statutory incidence or payment obligation imposed on the contractor under the Central Goods and Services Tax Act, 2017, the Karnataka Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act, 2017.

Conclusion: The contractor's GST liability must be determined strictly under the applicable GST statute and cannot be altered by the terms of the private contract.

Issue (ii): Whether revised returns could be permitted and interest, penalty or limitation could be waived contrary to the GST enactments.

Analysis: Directions permitting revised or amended returns in a manner contrary to the statutory scheme, waiving interest or penalty, and relaxing the limitation applicable to filing returns cannot be issued without statutory authority.

Conclusion: The directions permitting such statutory departures are unsustainable.

Issue (iii): Whether reimbursement of differential GST could be directed against the tax authorities or the concerned government employer.

Analysis: Any entitlement to reimbursement of incremental tax arises from the contractual relationship between the contractor and the employer. The tax authorities are not liable to reimburse the differential amount, although the direction for reimbursement may operate against the concerned employer in accordance with the contractual and applicable legal framework.

Conclusion: Reimbursement directions are confined to the concerned government employer and do not extend to the tax authorities or the State in its taxing capacity.

Final Conclusion: The statutory GST liability and related assessment process remain governed by the GST enactments, while any contractual reimbursement dispute is confined to the contractor and the government employer.

Ratio Decidendi: Contractual terms cannot alter statutory GST liability, and writ directions cannot waive or relax statutory requirements in the absence of authority under the applicable GST enactments.

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