2020 (8) TMI 159 - HC - GST

Profiteering - sale of refrigerator Whirlpool FP313D PROTTON ROY MIRROR - contravention of provisions of Section 171 of CGST Act - HELD THAT - Petitioner is directed to deposit ₹ 4,07,451/- with Central and State Consumer Welfare Boards within two months - The interest amount as well as penalty and further investigation with regard to other impacted products as well as the letters dated 02nd July, 2020 and 23rd July, 2020 issued by the DGAP are stayed till further orders. Issue Notice - List the matter on 28th September, 2020.

Summary

Issues:
Challenge to interim orders of National Anti-Profiteering Authority under CGST Act, constitutionality of Section 171 of CGST Act and related rules, prohibition against expanding investigation scope, challenge to DGAP letters, composition of respondent no. 2 under Rule 122 of CGST Rules, and validity of Notification dated 4/10/2019.

Analysis:
The High Court heard a writ petition challenging interim orders of the National Anti-Profiteering Authority (NAPA) under the Central Goods and Services Tax Act, 2017. The Authority found the petitioner guilty of contravening Section 171 of the CGST Act by profiteering on the sale of a refrigerator. The petitioner was directed to reduce the price of the refrigerator and deposit the profiteered amount within three months, along with interest. The petition also sought to prohibit the Authority from expanding the investigation scope to other products, challenging DGAP letters calling for further investigation details. Additionally, the petitioner challenged the constitutionality of Section 171 of the CGST Act, Chapter XV of CGST Rules, the composition of respondent no. 2 under Rule 122 of CGST Rules, and the validity of certain notifications.

The Court issued notice to the respondents, who were given time to file their counter affidavits. The petitioner was directed to deposit the profiteered amount with Consumer Welfare Boards within two months. The Court stayed the interest amount, penalty, and further investigation related to other products, as well as the DGAP letters, pending further orders. The matter was listed for a future date, and the order was to be uploaded on the website and forwarded to the counsel via email.

In conclusion, the High Court allowed the writ petition challenging the NAPA's interim orders under the CGST Act. It addressed various issues, including the constitutionality of Section 171 of the CGST Act, the scope of investigation, and the validity of certain rules and notifications. The Court provided directions regarding the deposit of the profiteered amount and stayed further actions pending the outcome of the case.