2021 (4) TMI 795 - HC - GST

Profiteering - noticees cannot be placed material relevant for the purpose of investigation/inquiry - Director General of Anti-Profiteering, investigating agency or not - Rule 126 of the Central Goods and Services Tax Rules, 2017 - HELD THAT - The NAPA, as per clause (25), of the same framework permits the interested parties/noticees to file only written submissions, and address oral arguments albeit with its permission. Issue notice.

Summary

Issues:
1. Interpretation of Rule 126 of the Central Goods and Services Tax Rules, 2017 regarding the powers of the Director General of Anti-Profiteering (DGAP) in investigations.
2. Examination of the procedures and methodology followed by the National Anti-Profiteering Authority (NAPA) in conducting proceedings.
3. The right of noticees to present relevant material before the DGAP and NAPA during investigations.

Analysis:
1. The petitioner's counsel raised a crucial issue concerning the DGAP's stance on allowing noticees to submit relevant material during investigations. The petitioner argued that the DGAP's refusal to consider such material hampers the investigative process, especially under Rule 126 of the Central Goods and Services Tax Rules, 2017. The petitioner highlighted Clause (24) of the "Procedure & Methodology," which restricts interested parties from presenting additional evidence before the Authority.

2. The petitioner contended that due to the DGAP's restrictions, even if relevant material is not accepted, it cannot be submitted to the NAPA as per the established procedures. The NAPA's Clause (25) mandates interested parties to primarily submit written submissions, with oral arguments subject to the Authority's permission. The petitioner emphasized the restrictive nature of these clauses, limiting the ability of noticees to present their case effectively during the proceedings.

3. The Court acknowledged the issue raised by the petitioner and issued notice to the respondents. The respondents' counsels accepted the service and assured to revert with instructions before the next hearing date. If instructions are received to contest the petition, a counter-affidavit will be filed. The matter was listed for further hearing on 03.05.2021, with a directive to maintain the status quo regarding the petitioner until then.

This judgment delves into the procedural intricacies of investigations conducted by the DGAP and NAPA in matters related to anti-profiteering, emphasizing the importance of allowing noticees to present relevant material for a fair and transparent process. The Court's intervention signifies a crucial examination of the balance between investigative powers and the rights of parties involved in such proceedings.