2024 (2) TMI 859 - SCH - GST

Profiteering - Constitutional validity of Section 171 of the Central Good and Services Tax Act, 2017 and Rules 122, 124, 126, 127, 129, 133 and 134 of the Central Good and Services Tax Rules, 2017 - legality of the notices proposing imposition or orders imposing penalty issued by the National Anti-Profiteering Authority (NAA) under Section 122 of the Act, 2017 read with Rule 133(3)(d) of the Rules, 2017 - Direction to pass on the commensurate benefit of reduction in the rate of tax or the Input Tax Credit to its consumers / recipients along with interest. It was held by High Court that The constitutional validity of Section 171 of Act, 2017 as well as Rules 122, 124, 126, 127, 129, 133 and 134 of the Rules, 2017 is upheld. This Court clarifies that it is possible that there may be cases of arbitrary exercise of power under the anti-profiteering mechanism by enlarging the scope of the proceedings beyond the jurisdiction or on account of not considering the genuine basis of variations in other factors such as cost escalations on account of which the reduction stands offset, skewed input credit situations etc. However, the remedy for the same is to set aside such orders on merits. HELD THAT - Issue notice. However, the issuance of notice by this Court shall not be construed either by the parties or by the High Court as a restraint on the High Court for the disposal of the main petition, including WPC No 1655 of 2019, under Article 226 of the Constitution.

Summary

The Supreme Court of India issued notice in the case, but clarified that it should not restrain the High Court from proceeding with the main petition under Article 226 of the Constitution. (Citation: 2024 (2) TMI 859 - SC Order)