2020 (8) TMI 570 - HC - GST

Profiteering - direction to deposit the profiteered amount - Vires of Section 171 of the CGST Act and Chapter XV of the CGST Rules - vires of Rules 123 and 129 of the CGST Rules - HELD THAT - This Court in PHILLIPS INDIA LIMITED VERSUS UNION OF INDIA ORS. 2020 (6) TMI 626 - DELHI HIGH COURT , this Court directs the petitioner to deposit the principal profiteered amount i.e. ₹ 19,81,035/- (i.e. ₹ 20,80,087/- minus ₹ 99,052/-) in six equated monthly instalments commencing 01st September, 2020. The interest amount directed to be paid by the respondents is stayed till further orders. List on 03rd November, 2020.

Summary

Issues:
Challenge to order of National Anti-Profiteering Authority under CGST Act, challenge to Section 171 of CGST Act and Chapter XV of CGST Rules, challenge to Rules 123 and 129 of CGST Rules, request for instalment payment due to Covid-19 pandemic.

Analysis:
The petition challenges the order of the National Anti-Profiteering Authority, which found the petitioner in contravention of anti-profiteering provisions of the Central Goods and Services Tax (CGST) Act, 2017, directing a deposit of profiteered amount with interest. The petitioner seeks to declare Section 171 of the CGST Act and Chapter XV of the CGST Rules as arbitrary, discriminatory, and unconstitutional. Additionally, the petitioner requests these provisions to be deemed inapplicable post the transition period of 1st July, 2017, claiming inconsistency with the intent of the CGST Act.

The petitioner also challenges Rules 123 and 129 of the CGST Rules, arguing them to be ultra vires the CGST Act due to the absence of an enabling provision for the constitution of respondent no. 3 or the Standing Committee and other State Screening Committees. The counsel for the petitioner highlights that the alleged profiteered demand includes GST imposed on the net profiteered amount, already deposited with the Tax Department, amounting to ?99,052. Due to the Covid-19 pandemic, the petitioner requests permission to pay the remaining amount in instalments.

The High Court issues notice to the respondents and directs them to file counter-affidavits within four weeks. The Court orders the petitioner to deposit the principal profiteered amount of ?19,81,035 in six equated monthly instalments starting from 1st September, 2020, citing precedents in similar cases. The Court stays the payment of interest until further orders. The counsel for both parties are instructed to submit short written submissions before the next hearing scheduled for 3rd November, 2020. The order is to be uploaded on the website immediately, and copies are to be sent to the counsels via email.