Case Note & Summary
The writ petition was filed by M/s. Bagalkot Nirmithi Kendra, a society registered under the Karnataka Societies Registration Act, 1960, seeking a declaration that it is a 'Government Entity' under Clause (zfa) of Notification No.32/2017 dated 13.10.2017 and consequently entitled to tax exemption under Entry No.9B of the said notification. The petitioner was established under the National Network Programme of Building Centres Scheme by the Housing and Urban Development Corporation of the Government of India and is exclusively engaged in civil construction works for the State and Central Governments. Its governing body comprised 14 members, chaired by the Deputy Commissioner and including several ex-officio government officials such as the Chief Executive Officer of the Zilla Panchayat and the District Welfare Officer. After the introduction of the GST regime, the Central Government issued Notification No.12/2017 exempting certain entities from tax liability. Subsequently, the State Government amended the definition of 'Government Entity' by adding Clause (zfa) through Notification No.32/2017. An audit of the petitioner for the period July 2017 to March 2018 led to a communication from the fourth respondent, the Assistant Commissioner of Central Excise, dated 07.07.2021, stating that the petitioner could not be exempted from GST liability. The petitioner contended that it was wholly controlled by the State Government, no other person had any control, and it only undertook government contracts, thus meeting the definition of a 'Government Entity'. The respondents argued that the petitioner was not a government entity and was liable to pay tax like other Nirmithi Kendras in the State. The High Court heard the arguments and reserved the matter on 14.10.2025, with the judgment to be pronounced on 25.11.2025. The provided judgment text ends before the final decision and reasoning of the court.
Headnote
A) Goods and Services Tax - Exemption for Government Entities - Definition of 'Government Entity' under Notification No.32/2017, Clause (zfa) - The High Court examined whether Bagalkot Nirmithi Kendra, a society registered under the Karnataka Societies Registration Act, 1960, established by a government order dated 05.09.1990 and wholly controlled by government officials, qualifies as a government entity for tax exemption under Entry 9B of the notification - The court heard arguments on the interpretation of the amended definition and whether the petitioner falls within its scope, noting that the governing body is chaired by the Deputy Commissioner and comprises ex-officio government members - The matter was reserved for orders on 14.10.2025, with judgment to be pronounced on 25.11.2025 (Paras 1-14).
Issue of Consideration
Whether the petitioner is to be declared as 'Government Entity' as obtaining in the notification dated 13.10.2017, exempting it from tax liability and consequently, the impugned communications to be obliterated.
Law Points
- interpretation of 'Government Entity' under Notification No.32/2017
- GST exemption for government-controlled societies
- criteria for tax exemption under Entry 9B of Notification No.32/2017
Case Details
2025 LawText (KAR) (11) 53
WRIT PETITION No.103139 OF 2021 (T-RES)
GIRISH A.YADAWAD, M.B.KANAVI, GIRISH S.HULMANI, KIRTILATA R.PATIL
M/S. BAGALKOT NIRMITHI KENDRA, REPRESENTED BY ITS PROJECT DIRECTOR SHANKARILNGA S/O LATE NAGAPPA GOGI.
THE UNION OF INDIA, THE GST COUNCIL, THE COMMISSIONER OF CENTRAL TAX (AUDIT) DHARWAD, THE ASSISTANT COMMISSIONER (AUDIT) CENTRAL EXCISE, THE UNDER SECRETARY TO THE GOVERNMENT OF INDIA, STATE OF KARNATAKA, THE UNDER SECRETARY TO THE GOVERNMENT OF KARNATAKA, THE DEPUTY COMMISSIONER BAGALKOT DISTRICT
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India seeking a declaration that the petitioner is a 'Government Entity' and entitled to tax exemption under the GST regime, and challenging a communication that denied such exemption.
Remedy Sought
Declaration that petitioner is a 'Government Entity' under Clause (zfa) of Notification No.32/2017 dated 13.10.2017 and consequently entitled to tax exemption under Entry No.9B, and quashing of the communication dated 07.07.2021.
Filing Reason
The fourth respondent Assistant Commissioner (Audit) issued a communication dated 07.07.2021 indicating that the petitioner could not be exempted from tax liability under the notification, leading the petitioner to seek judicial determination of its status.
Issues
Whether the petitioner, M/s. Bagalkot Nirmithi Kendra, qualifies as a 'Government Entity' under Clause (zfa) of Notification No.32/2017 dated 13.10.2017 and is thereby entitled to tax exemption under Entry No.9B.
Submissions/Arguments
Petitioner argued that it was established by a government order, is wholly controlled by the Government of Karnataka with its governing body chaired by the Deputy Commissioner and comprising ex-officio government members, undertakes only government construction works, and thus falls within the definition of 'Government Entity' under the amended notification.
Respondents contended that the petitioner is not a 'Government Entity' and is liable to pay GST like other Nirmithi Kendras in the State.
Judgment Excerpts
The petitioner – M/s. Bagalkot Nirmithi Kendra is at the doors of this Court seeking a direction to declare the petitioner to be a ‘Government Entity’ as defined under Clause (zfa) of the notification dated 13.10.2017 issued by the Government of Karnataka and consequently, declare that the petitioner is entitled to tax exemption under Entry No.9B of the said notification and has also called in question a communication dated 07.07.2021 issued by the fourth respondent.
FINANCE SECRETARIAT NOTIFICATION (32/2017) No. FD 48 CSL 2017 Bengaluru, dated :13.10.201
Procedural History
Petitioner was subjected to an audit for the period July 2017 to March 2018; the fourth respondent sought documents; petitioner submitted documents; the fourth respondent issued communication dated 07.07.2021 denying tax exemption; petitioner approached the High Court by filing the present writ petition.
Acts & Sections
- Karnataka Societies Registration Act, 1960:
- Goods and Services Tax, 2017:
- Notification No.12/2017:
- Notification No.32/2017 dated 13.10.2017: Clause (zfa), Entry No.9B
