2020 (9) TMI 830 - HC - GST

Profiteering - Vires of Section 171 of CGST Act and Chapter XV of the CGST Rules - vires of Rule 123, 129 and 133(3) of the CGST Rules - violation of Articles 14, 19(1)(g), 50, 256 and 300A of the Constitution of India - HELD THAT - Keeping in view the orders passed by this Court in Phillips India Limited Vs. Union of India Ors. (W.P.(C) No.3737/2020) as well as M/s Samsonite South Asia Pvt. Ltd. Vs. Union of India Ors. (W.P.(C) No.4131/2020 and M/s Patanjali Ayurved Ltd. Vs. Union of India Ors. (W.P.(C) No.4375/2020), 2020 (7) TMI 614 - DELHI HIGH COURT this Court directs the petitioner to deposit the principal profiteered amount (i.e. ₹ 7,53,854/- and ₹ 35,898/-) in six equated monthly installments commencing 30th September, 2020 - However, the interest amount directed to be paid by the respondents as well as penalty proceedings are stayed till further orders. List on 03rd November, 2020.

Summary

Issues:
Challenge to final order of profiteering, Constitutional validity of Section 171 of CGST Act and related rules, Applicability of provisions to post-transition period, Request for installment payment due to COVID-19 pandemic.

Analysis:
The petition before the Delhi High Court challenges a final order passed by the National Anti-Profiteering Authority (NAPA) holding the petitioner liable for profiteering an amount, including GST, during a specific period. The petitioner seeks a declaration that Section 171 of the CGST Act and related rules are arbitrary, discriminatory, and unconstitutional, violating various Articles of the Constitution. Additionally, the petitioner argues that certain rules are ultra vires the CGST Act and inapplicable to the post-transition period after 1st July 2017, contrary to their intended purpose.

The counsel for the petitioner highlights that the alleged profiteered demand, as per NAPA's findings, includes an amount already deposited with the Department. Due to the COVID-19 pandemic, the petitioner requests permission to pay the remaining amount in installments. The Court issues notice to the respondents, who accept notice on behalf of their respective parties.

In line with previous judgments, the Court directs the petitioner to deposit the principal profiteered amount in six equated monthly installments starting from a specified date. However, the payment of interest and penalty proceedings are stayed until further orders. The parties are instructed to submit short written submissions before the next hearing date, and the case is listed for further proceedings in November 2020.

This judgment addresses the challenge to a profiteering order, questions the constitutional validity of relevant GST provisions, considers installment payment due to the pandemic, and provides a structured approach for the deposit of the profiteered amount. The Court's decision reflects a balance between the petitioner's concerns and the legal obligations under the CGST Act, ensuring a fair hearing and resolution of the matter.