2020 (10) TMI 573 - HC - GST

Levy of GST on profiteered amount - constitutional validity of Section 171 of Central Goods and Services Tax Act and Rules 126, 127 and 133 of the CGST Rules - HELD THAT - Keeping in view the orders passed by this Court in PHILLIPS INDIA LIMITED VERSUS UNION OF INDIA ORS. 2020 (6) TMI 626 - DELHI HIGH COURT as well as M/S. SAMSONITE SOUTH ASIA PVT. LTD. VERSUS UNION OF INDIA ORS. 2020 (7) TMI 526 - DELHI HIGH COURT and M/S. PATANJALI AYURVED LTD. VERSUS UNION OF INDIA ORS. 2020 (7) TMI 614 - DELHI HIGH COURT , this Court directs the petitioner to deposit the principal profiteered amount i.e. ₹ 25,53,454/- (₹ 30,13,058/- minus ₹ 4,59,604/-) in six equated installments commencing 02nd November, 2020. The interest amount directed to be paid by the respondents as well as penalty proceedings are stayed till further orders. List on 03rd November, 2020.

Summary

Issues:
Challenge to judgment of National Anti Profiteering Authority (NAPA), constitutionality of certain GST provisions, installment payment request due to Covid-19 impact.

Analysis:
The petition challenges the NAPA's order holding the petitioner liable for profiteering an amount inclusive of GST during a specific period. The petitioner seeks to quash the directions on interest and penalties in the impugned order. Additionally, a declaration is sought that Section 171 of Central Goods and Services Tax Act and certain CGST Rules are unconstitutional and violate various Articles of the Indian Constitution. The constitutionality of NAPA under Rule 122 of CGST Rules is also contested, citing conflict with Supreme Court directions.

The petitioner, through its counsel, highlights that the alleged profiteered demand, including the GST component, has already been deposited with the Tax Department. Due to the Covid-19 pandemic, a plea is made for allowing installment-based payment of the remaining amount. The court issues notice to the respondents, and counter-affidavits are directed to be filed within two weeks, with an opportunity for rejoinder-affidavits before the next hearing.

Referring to previous judgments, the court orders the petitioner to deposit the principal profiteered amount in installments, starting from a specified date. The interest and penalty proceedings are stayed pending further orders. Both parties are instructed to submit concise written submissions before the next hearing date. The case is listed for further proceedings on a specific date, and the order is to be uploaded on the court's website and shared with the counsels via email promptly.