2020 (2) TMI 548 - HC - GST

Computation of ITC - alleged profiteering and demand - Petitioner submits that if only the ITC availed of in respect of the residential project is considered, the demand would not be more than ₹ 64 lakhs - HELD THAT - The petitioner is directed to deposit ₹ 65 lakhs as an interim measure within three months in three equated instalments. The first instalment shall be paid by 15.02.2020. It shall be open to the respondents to seek variation of this order, in case; they claim that the aforesaid statement of the petitioner is not correct by moving an appropriate application - the penalty proceedings shall remain stayed - application disposed off.

Summary

Issues involved:
1. Computation of Input Tax Credit (ITC) for Residential and Commercial Projects
2. Alleged profiteering and demand based on ITC availed
3. Direction for depositing a specific amount as an interim measure
4. Stay on penalty proceedings pending enquiry on the Commercial Project

Analysis:

1. Computation of Input Tax Credit (ITC) for Residential and Commercial Projects:
The petitioner raised concerns regarding the computation of ITC for two projects, namely the Residential Project - Gulmohar Green and the Commercial Project - Anandam Square. The petitioner argued that the figures provided by the Director General were relied upon by the authority for both projects. However, it was highlighted that further investigation was directed for the Commercial Project, indicating discrepancies in the ITC availed. The petitioner contended that if only the ITC for the residential project was considered, the demand would not exceed ?64 lakhs.

2. Alleged profiteering and demand based on ITC availed:
Considering the discrepancies in the ITC availed for the Commercial Project, the court directed the petitioner to deposit ?65 lakhs as an interim measure within three months in three equal instalments. The first instalment was required to be paid by a specified date. The court allowed the respondents to challenge the correctness of the petitioner's statement by filing an appropriate application. The penalty proceedings were stayed temporarily, but the Director General was instructed to proceed with the enquiry regarding the Commercial Project.

3. Direction for depositing a specific amount as an interim measure:
In response to the concerns raised by the petitioner regarding the computation of ITC and the alleged profiteering, the court issued a specific direction for the petitioner to deposit ?65 lakhs as an interim measure within a stipulated timeframe and in equal instalments. This measure was intended to address the immediate financial implications of the ongoing dispute and ensure compliance with the court's directives.

4. Stay on penalty proceedings pending enquiry on the Commercial Project:
While the penalty proceedings were temporarily stayed, the court emphasized the importance of the Director General conducting a thorough enquiry specifically concerning the Commercial Project. This decision aimed to facilitate a comprehensive investigation into the ITC availed in relation to the Commercial Project, ensuring that any potential discrepancies or irregularities were appropriately addressed before further penalties or actions were imposed.

This detailed analysis of the judgment highlights the key issues addressed by the court, the specific directives issued, and the rationale behind the decisions made in response to the concerns raised by the petitioner regarding the computation of Input Tax Credit and alleged profiteering.