2020 (7) TMI 670 - HC - GST

Profiteering - Jurisdiction - time limitation - principles of natural justice - commensurate reduction in GST prices to its recipients, by grammage increase - HELD THAT - Petitioner is directed to deposit the principal profiteered sum of ₹ 2,33,456/- within two weeks. Upon deposit of the said amount, interest amount as well as the penalty proceedings initiated by the respondents shall stand stayed till further orders. List the matter on 24th August, 2020 along with other connected matters.

Summary

Issues:
Challenging order of National Anti-Profiteering Authority, jurisdiction, principles of natural justice, commensurate reduction in prices, legitimacy of grammage increase, reference to previous judgments.

Jurisdiction and Limitation:
The petitioner challenged the order of the National Anti-Profiteering Authority, claiming that the proceedings were without jurisdiction as they were time-barred under Rule 128(i) of the Central Goods and Services Tax Rules 2017. The petitioner argued that the investigation was initiated based on a second complaint that was never provided to them, emphasizing a violation of principles of natural justice. The petitioner highlighted that the report referred only to the first complaint, dated 30th July, 2018, with no mention of the second complaint from 22nd February, 2019.

Methodology for Price Reduction:
The petitioner contended that they had passed on a commensurate reduction in prices to recipients through a grammage increase. They referred to a previous case where the National Anti-Profiteering Authority had accepted grammage increase as a legitimate method to pass on price reductions following a GST rate decrease. Additionally, the petitioner mentioned a specific judgment from a coordinate Bench of the Court involving a manufacturer of the same product, supporting their argument.

Court Directions and Proceedings:
The Court allowed the petitioner's challenge against the National Anti-Profiteering Authority's order and directed the petitioner to deposit the principal profiteered sum within two weeks. Upon deposit, the interest and penalty proceedings initiated by the respondents were stayed until further orders. The matter was listed for further hearing along with related cases on a specified date. The Court also instructed the uploading of the order on the website and dissemination to the parties' counsel via email for compliance and reference.