2022 (7) TMI 1479 - NAPA - GST

Profiteering - Construction Services supplied by the Respondent - fraud and forgery on the part of the Respondent - fault in calculations of the profiteered amount, saleable area and the total turnover of the Respondent by the DGAP - time limitation - HELD THAT - This Authority finds that, the narrated submissions of the Applicant No. 1 require due scrutiny and consideration. Therefore, without going into the merits and the other submissions made by the Respondent and the Applicant Nos. 1 2 at this stage, the Authority finds that this case needs to be reinvestigated by the DGAP based on the above observations of this Authority. Thus the Authority directs the DGAP to reinvestigate the matter as per the provisions of rule 133(4) of the CGST Rules 2017. The DGAP shall and must determine the authenticity and correctness of the data/information and records upon which its Report is based and after determining the authenticity of such information/data records reinvestigate and redetermine the profiteered amount, if any, for the Project and for each eligible recipient of supply in the said Project based upon such authentic and correct data, information and records. The Hon'ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2020 (5) TMI 418 - SC ORDER , while taking suo motu cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under the general law of limitation or any other special laws (both Central and State) including those prescribed under rule 133(1) of the CGST Rules, 2017 - Accordingly this Order having been passed today falls within the limitation prescribed under rule 133(1) of the CGST Rules, 2017.

Issues Involved:

1. Allegation of profiteering by the Respondent.
2. Calculation and verification of the profiteered amount.
3. Disclosure of confidential records and waiver of confidentiality.
4. Allegations of fraud and forgery by the Respondent.
5. Recalculation of saleable area and turnover.
6. Reinvestigation of the matter by the Director General of Anti-Profiteering (DGAP).

Issue-wise Detailed Analysis:

1. Allegation of Profiteering by the Respondent:
The Applicant alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the unit purchased in the "Prateek Edifice" project, as required under Section 171 of the CGST Act, 2017. The DGAP's report indicated that the Respondent had benefited from additional ITC to the tune of 7.37% of the turnover, amounting to profiteering of Rs. 11,99,09,042, which included 12% GST on the base amount of Rs. 10,70,61,545 for the period from 1-7-2017 to 31-12-2019.

2. Calculation and Verification of the Profiteered Amount:
The Applicant disputed the DGAP's calculations and sought verification of the reimbursement of the profiteered amount to homeowners. The Applicant provided documentary proof, including sworn affidavits, alleging discrepancies in the calculation of the profiteered amount, saleable area, and total turnover. The Authority directed the DGAP to verify the documents and recalculate the profiteered amount based on authentic records.

3. Disclosure of Confidential Records and Waiver of Confidentiality:
The Applicant requested the waiver of confidentiality of the Respondent's records. The Respondent objected, citing that the information included commercial confidence and trade secrets, which are exempt from disclosure under Section 8(d) & (j) of the RTI Act. The Authority found that some information (Annexures-5 & 6) was not confidential and could be disclosed, while other information (Annexures-7 to 14 & 17 to 19) was confidential and could harm the Respondent's competitive position.

4. Allegations of Fraud and Forgery by the Respondent:
The Applicant alleged that the Respondent had submitted manipulated, false, and forged information to the DGAP. The Applicant provided evidence that the GST benefit passed on to him and his cousin was inconsistent, despite identical booking terms and payment schedules. The Applicant claimed that no credit notes were issued to support the GST benefit, and the Respondent provided wrong email IDs to avoid detection of fraud.

5. Recalculation of Saleable Area and Turnover:
The Applicant contested the saleable area reported by the DGAP, providing evidence from RERA and the Uttar Pradesh Apartment Act. The Authority directed the DGAP to reverify the saleable area based on RERA documents and recalculate the profiteered amount accordingly. The Applicant also disputed the Respondent's turnover figures, providing audited balance sheets to support his claim.

6. Reinvestigation of the Matter by the DGAP:
The Authority concluded that the case required reinvestigation by the DGAP to verify the authenticity and correctness of the data/information and records. The DGAP was directed to reinvestigate and redetermine the profiteered amount for the project and each eligible recipient based on verified and authentic records.

Conclusion:
The Authority directed the DGAP to reinvestigate the matter, verify the authenticity of the records, and recalculate the profiteered amount based on accurate and authentic data. The case was to be reinvestigated as per the provisions of Rule 133(4) of the CGST Rules, 2017. The order was issued within the extended limitation period prescribed by the Supreme Court due to the COVID-19 pandemic.

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