2024 (12) TMI 337 - HC - GST

Constitutional validity of Section 171 of the CGST Act - HELD THAT - In this case, the authority has made a determination. Though the petitioners have their objections to the methodology employed or the determination of profits, the same could be examined since it is pointed out that the petitioners have no right of appeal against such determination. However, since the petitioners seek interim relief, it is only appropriate that in the facts of this case, if the petitioners deposit 50 per cent of the profited amount referred to in paragraphs 49 and 50 of the impugned order (by excluding the interest thereon), in this Court within 8 weeks from today. The interests of justice would be best served by granting such a conditional stay. There shall be ad-interim relief in terms of the prayer clause (h) subject to petitioners depositing 50 per cent of the profited amount referred to in paragraphs 49 and 50 of the impugned order (by excluding the interest thereon), in this Court within 8 weeks from today.

Summary

Issues:
Challenge to constitutional validity of Section 171 of the CGST Act and rules regarding National Anti-Profiteering Authority.

Analysis:
The judgment involves a challenge to the constitutional validity of Section 171 of the CGST Act and certain rules related to the National Anti-Profiteering Authority. The petitioners argue that the impugned order directing them to deposit amounts with the prescribed authority contains serious errors, with profits being arbitrarily determined. The respondents cite a Delhi High Court decision rejecting similar challenges, arguing that the methodology chosen by the NAA was fair and reasonable. The petitioners seek interim relief from depositing the determined amount, claiming that the Delhi High Court had set aside determinations in similar cases and that an erroneous methodology was used in their case.

The Court acknowledges the authority's determination and the petitioners' objections to the methodology and profit determination. While the petitioners have no right of appeal against such determination, they seek interim relief. The Court deems it appropriate for the petitioners to deposit 50% of the profited amount mentioned in the impugned order within 8 weeks to grant conditional stay. Failure to deposit the amount would result in the vacation of the ad-interim relief without further reference to the Court.

Additionally, the Court extends the time for filing the affidavit in the main petition and for filing a rejoinder by six weeks each. The judgment balances the need for interim relief with the requirement for the petitioners to deposit a portion of the determined amount, taking into account the petitioners' objections to the methodology employed in determining profits. The Court's decision aims to serve the interests of justice by granting conditional relief while ensuring compliance with the deposit requirement.