2020 (9) TMI 982 - HC - GST

Profiteering - service of notice - grievance of the petitioner is that the notice dated 7th February, 2020 issued by the respondent No.2 DG to the petitioner is not in compliance with Rule 129(3)(a) (b) of the Central Goods and Services Tax Rules, 2017 - HELD THAT - The counsel for the respondents appearing on advance notice though has sought to contend by reading of Rule 129(2) that the proceedings still are at the stage thereof and the stage of issuance of notice under Rule 129(3) has not reached but prima facie it does not appear to be correct inasmuch as Rule 129(1) as well as Rule 129(2) use the word 'investigation' and Rule 129(3) provides that, before initiation of investigation, notice containing the aforesaid particulars will be issued. It thus appears that before the investigation under Rule 129(2) is initiated, notice containing the particulars described in Rule 129(3) has to be issued. Also, this is not the right stage for the petitioner to make other challenges to the proceedings and right to make which challenges can be reserved, if pursuant to the investigation, any adverse report is submitted by DG to respondent No.1 NAPA or if respondent No.1 NAPA initiates any proceedings against the petitioner or may be, even after the order, if any of respondent No.1 NAPA. Issue notice limited to the aforesaid confines - List on 30th September, 2020.

Summary

Issues involved:
Challenge to the notice issued by Directorate General of Anti-Profiteering, compliance with Rule 129(3)(a) & (b) of Central Goods and Services Tax Rules, 2017.

Analysis:

Issue 1: Impugning the notice and compliance with Rule 129(3)(a) & (b) of CGST Rules:
The petition challenges a notice dated 7th February, 2020 issued by the Directorate General of Anti-Profiteering and raises concerns about compliance with Rule 129(3)(a) & (b) of the Central Goods and Services Tax Rules, 2017. The petitioner argues that the notice lacks essential information required by the rule, such as a description of goods or services and a summary of facts forming the basis of the allegations. The petitioner suggests that satisfaction could be achieved if the respondents confirm that the goods and services under investigation align with those detailed in statements forwarded by the National Anti-Profiteering Authority to the Standing Committee. The counsel for the respondents contends that the proceedings are still at an earlier stage as per Rule 129(2); however, the Court opines that notice with specified particulars must precede the initiation of an investigation under Rule 129(2).

Issue 2: Timing and scope of challenges to the proceedings:
The Court indicates that the current stage primarily concerns the petitioner's grievance regarding the inadequacy of the notice issued by the Directorate General of Anti-Profiteering. It clarifies that challenges beyond this specific issue should be reserved for later stages, such as after the submission of an adverse report by the DG to the National Anti-Profiteering Authority or initiation of further proceedings by the Authority. The Court limits the notice to the discussed confines and schedules the next hearing for September 30, 2020, allowing the respondents time to provide instructions on the specific aspect raised by the petitioner.

This detailed analysis of the judgment highlights the issues raised, the arguments presented by both parties, and the Court's observations and directions concerning the compliance with relevant rules and the appropriate timing for challenging different aspects of the proceedings.