2020 (9) TMI 685 - HC - GST

Profiteering - Constitutional Validity of Section 171 of the Central Goods and Services Tax Act, 2017 and Rules 122 to 137 of the Central Goods and Services Tax Rules, 2017 - Procedure and Methodology issued under Rule 126 by the respondent no. 3-NAPA. HELD THAT - Issue Notice. No ground for stay of payment is made out in the present case. Respondent no.3 is directed to verify the claims made by the petitioner with respect to passing on the commensurate benefit amounting to ₹ 35,28,744/-.

Summary

Issues:
Challenge to orders passed by respondent no. 3-NAPA, Constitutional validity of Section 171 of the Central Goods and Services Tax Act, 2017 and Rules 122 to 137 of the Central Goods and Services Tax Rules, 2017, Validity of notices and summons issued by respondent no. 4-DGAP, Compliance with passing on benefits to flat buyers, Stay of penalty and investigation for other projects.

Analysis:
The petition challenges orders dated 14th February, 2020 and 17th January, 2020 passed by respondent no. 3-NAPA, alleging profiteering by the petitioner. Additionally, the constitutional validity of Section 171 of the CGST Act, 2017 and related rules is questioned, asserting that the proceedings are unconstitutional and without jurisdiction. The petitioner also contests various notices and summons issued by respondent no. 4-DGAP.

The petitioner had admitted profiteering of &8377; 35,28,744/- and expressed intent to pay the amount to flat buyers with interest. It is claimed that a portion of the profiteered amount has already been passed on, with the remaining sum deposited in a dedicated account. The petitioner assures that benefits post introduction of CGST and SGST have been extended to flat buyers in Haryana.

An undertaking dated 08th September, 2020, submitted by the petitioner, commits to providing benefits to ongoing projects as per Section 171. The Court accepts these undertakings, binding the petitioner to fulfill them. Respondents are granted time to file counter-affidavits.

The Court directs respondent no. 3 to verify the petitioner's claims regarding passing on the benefit of &8377; 35,28,744/-. However, penalties and investigations concerning other projects and the notices issued by respondent no. 4-DGAP are stayed until further orders. The matter is listed for the next hearing on 3rd November, 2020, along with related cases.

In conclusion, the Court upholds the necessity for the petitioner to comply with passing on benefits to flat buyers, while also ensuring a fair verification process by respondent no. 3. The stay on penalties and investigations for other projects signifies a temporary reprieve pending further developments in the case.