2020 (2) TMI 1184 - HC - GST

Reduction in the rate of GST - Situation pre and post GST implementation - It is pointed out by learned senior counsel for the petitioner that the respondents have acted unreasonably, inasmuch, as, for the period prior to reduction of GST from 12% to nil w.e.f. 27.07.2018, the DGAP had computed the base price on average basis. However, for the period after the GST rate became nil w.e.f. 27.07.2018, the base price has been worked out item by item. HELD THAT - Our attention has been drawn to the tabulation filed by the petitioner before the DGAP, which shows that in respect of several items sold by the petitioner, after the reduction of GST to nil, the price actually fell, however, while computing the profiteered amount; such cases have been excluded from consideration - Prima facie, it appears to us that the impugned order needs consideration and the petitioner has been able to make out a strong case for grant of interim relief. List on 24.09.2020.

Summary

Issues: Grant of interim relief regarding computation of base price and profiteered amount under GST.

In the judgment, the court heard arguments from both the petitioner's senior counsel and the respondent's counsel regarding the grant of interim relief. The petitioner's counsel argued that the respondents had acted unreasonably by changing the method of computing the base price before and after the reduction of GST rates. The petitioner presented evidence showing that prices had actually fallen for some items after the GST rate reduction to nil, but these cases were excluded from consideration in the profiteered amount calculation. The court found that the impugned order required further consideration and that the petitioner had made a strong case for interim relief. Consequently, the court stayed the operation of the impugned order until the next hearing date and directed that no penalty proceedings be initiated against the petitioner in the meantime.

The court granted exemption to the petitioner, subject to all just exceptions, in a separate application. In another application, the court issued notice to the respondents, who accepted the notice. The court directed the filing of a counter-affidavit within six weeks and a rejoinder before the next hearing date.

The judgment was delivered by Mr. Vipin Sanghi and Mr. Sanjeev Narula JJ. The court's decision to grant interim relief was based on the petitioner's argument that the respondents had acted unreasonably in computing the base price and profiteered amount under GST regulations. The court found merit in the petitioner's case and stayed the operation of the impugned order until the next hearing.