2021 (1) TMI 1093 - HC - GST

Vires of Section 171 of the CGST Act, 2017 and other provisions under Chapter XV of the Act - composition of the Respondent No. 2/National Anti-Profiteering Authority under Rule 122 of the CGST Rules, 2017 - HELD THAT - Although in the order passed in NESTLE INDIA LTD. ANR. VERSUS UNION OF INDIA ORS. 2020 (2) TMI 671 - DELHI HIGH COURT the court has apparently not interdicted the suo moto investigation, but at the same time we notice that this Court has given protection to nearly all the Petitioners, faced with similar circumstances, i.e., wherever the authority has directed investigation in relation to products/services which were beyond the scope of original investigation. Therefore, we see no reason to deny the same relief to the Petitioner herein. Petitioner is therefore entitled to the interim protection, pending disposal of the present petition. Accordingly, it is directed that the directions given in the impugned order to Respondent No. 3 to investigate 14 projects of the Petitioner in the State of Haryana, shall remain stayed. It is however clarified that the investigation with respect to the Discovery Project at Faridabad shall continue in terms of the directions given in the impugned order. Issue Notice.

Summary

Issues: Challenge to the constitutional validity of Section 171 of the CGST Act and other provisions under Chapter XV, composition of the National Anti-Profiteering Authority, validity of impugned order directing fresh investigation, interim protection for the petitioner pending disposal of the petition.

In this judgment, the petition challenges the constitutional validity of Section 171 of the CGST Act and other provisions under Chapter XV, contending they are ultra vires Article 246A of the Constitution and violate other articles. The composition of the National Anti-Profiteering Authority under Rule 122 of the CGST Rules is also challenged as unconstitutional due to the absence of a judicial member. The petitioner is aggrieved by the impugned order directing fresh investigation of 14 projects in Haryana. The petitioner argues that similar interim orders have been granted in related petitions. The court notes that protection has been given to other petitioners in similar circumstances and grants interim protection to the petitioner, staying the investigation into the 14 projects in Haryana while allowing the investigation into the 'Discovery Project' to continue as per the impugned order.

The petitioner's counsel argues that the impugned order was based on non-consideration of submissions and factual errors, leading to a direction for further investigation. The respondent's counsel contends that no interim protection is necessary as the matter is still under investigation and that the National Anti-Profiteering Authority has the power to order investigations. The court observes that in a previous case, while not stopping suo moto investigations, protection was granted to petitioners facing similar circumstances. Consequently, the court grants interim protection to the petitioner, staying the investigation into the 14 projects in Haryana. However, the investigation into the 'Discovery Project' in Faridabad is allowed to proceed as per the impugned order.

The court reviews the impugned order, interim orders in similar cases, and the arguments presented. It finds that protection has been granted to other petitioners in analogous situations where investigations were extended beyond the original scope. Therefore, the court sees no reason to deny similar relief to the present petitioner. Consequently, the petitioner is granted interim protection until the disposal of the petition, with the direction that the investigation into the 14 projects in Haryana is stayed, while the investigation into the 'Discovery Project' continues. The court issues notice to the respondents and allows them to file counter affidavits within two weeks, listing the matter for further hearing in February 2021.