2023 (6) TMI 835 - HC - GST

Computation of profiteering - Constitutional Validity of anti-profiteering provisions contained in Section 171 of the G.S.T. Act and Rules - HELD THAT - As rightly held by the learned Writ Court, if the prayer for stay of the impugned provisions is granted, it would tantamount to granting the main relief in the writ petition apart from the settled legal position that a statutory provision is deemed to be valid in law unless it is being struck down. However, the appellants restrict the prayer with regard to amount of profiteering as computed by the first respondent in the order dated 30th September, 2022 and have raised various issues, which are all on the merits of the matter, which can be decided only after affidavit in opposition is filed by the respondents in the writ petition. However, considering the fact that as against the order impugned in the writ petition, the appellants did not have any other alternate remedy and the appellants have also questioned the vires of the statutory provision, there will be an order of interim stay of the order passed by the first respondent dated 30th September, 2022 subject to the condition that the appellants deposit with the Registrar General of this Court a sum of Rs. 6 crores. On such deposit being made, Registrar General is directed to deposit the said amount in an interest bearing account and the same shall continue in deposit till the writ is disposed of and shall abide by the orders that may be passed in the writ petition. Appeal disposed off.

Summary

Issues involved:
The judgment involves issues related to anti-profiteering provisions under Section 171 of the G.S.T. Act and Rules, constitutionality of the said provisions, computation of profiteering, validity of statutory provisions, interim relief, and deposit requirements.

Computation of Profiteering:
The respondent authority approved the computation of profiteering as per the DGAP's report, determining that the first appellant profiteered Rs. 4,11,40,502/- and the second appellant profiteered Rs. 2,50,94,164/- during the investigation period from 1st July, 2017 to 30th September, 2019.

Constitutionality Challenge and Relief Sought:
The appellants filed a writ petition challenging the constitutionality of anti-profiteering provisions under Section 171 of the G.S.T. Act and Rules. They sought a writ of declaration declaring these provisions unconstitutional and ultra vires the Act, as well as a writ of mandamus to recall the adjudication order and other consequential directions.

Grant of Interim Relief:
The Court acknowledged that granting the prayer for stay of the impugned provisions would amount to granting the main relief in the writ petition. However, due to the absence of an alternative remedy and the challenge to the vires of the statutory provision, the Court ordered an interim stay of the order subject to a deposit condition of Rs. 6 crores with the Registrar General.

Deposit Requirement and Disposal of Appeal:
The appellants were directed to deposit the specified amount within eight weeks, which would be held in an interest-bearing account until the final disposal of the writ petition. The appeal, along with the connected application, was disposed of with no order as to costs.

Judgment Disposition:
The judgment concluded with the disposal of the appeal, no costs ordered, and provision for expeditious furnishing of a certified copy of the order upon compliance with legal formalities. The Chief Justice and the other Justice agreed on the judgment.