2019 (1) TMI 1368 - HC - GST

Court Orders Rs. 90 Crore Deposit, Sets Timelines for Filings & Investigation, Emphasizes Prevention Measures.

The court directed the petitioner to deposit a total of Rs. 90 crores with the Central Consumer Welfare Fund in two instalments, while also allowing for ... Profiteering - Failure to reduce Maximum Retail Prices (MRPs) - Petition against the decision of NATIONAL ANTI-PROFITEERING AUTHORITY - CENVAT Credit - TRAN-2 credit - it is the contention of the petitioner that TRAN-2 credit was made available in March, 2018 - Area based exemption - Loss in North East Exemption being denied - case of respondents is that the documents on the amount refunded to Modern Trade Dealers have not been duly certified - Held that:- The petitioner is directed to deposit ₹ 90 crores with the Central Consumer Welfare Fund in two instalments of ₹ 50 crores and ₹ 40 crores which would be paid on or before 15th March, 2019 and 15th May, 2019 respectively - the said direction is given after being informed that the petitioner has already deposited ₹ 160 crores. Subject to the said deposit, no coercive steps would be taken in proceedings pursuant to the impugned order. Penalty proceeding would be kept in abeyance - Re-list on 16th April, 2019. Issues:1. Amount denied on extra grammage being claimed2. Amount refunded to Modern Trade Dealers but being denied3. Loss in North East Exemption being denied4. Packing material with old MRP written off5. Tax on Tax demanded6. Amount recovered from Dealers and deposited with the Government being demanded again7. TRAN-2 creditIssue 1 - Amount denied on extra grammage being claimed:The petitioner raised concerns about an amount of Rs. 27.77 crores being denied on extra grammage being claimed. The court noted the contention but did not delve into details, indicating the need for a response from the respondents.Issue 2 - Amount refunded to Modern Trade Dealers but being denied:A dispute arose over an amount of Rs. 26.37 crores refunded to Modern Trade Dealers but being denied. The petitioner provided evidence regarding the refund, while the respondents contested the submission, highlighting the lack of duly certified documents.Issue 3 - Loss in North East Exemption being denied:Regarding the loss in North East Exemption amounting to Rs. 45.31 crores, the petitioner argued that the reduction in compensation was not accounted for. The court was apprised of this discrepancy, emphasizing the need for a response from the respondents.Issue 4 - Packing material with old MRP written off:An amount of Rs. 7.80 crores related to packing material with old MRP written off was under contention. However, detailed arguments or responses were not provided in the judgment.Issue 5 - Tax on Tax demanded:Concerns were raised about Rs. 63.99 crores being demanded as tax on tax. The judgment did not elaborate on this issue, indicating the need for further consideration.Issue 6 - Amount recovered from Dealers and deposited with the Government being demanded again:The petitioner highlighted that an amount of Rs. 36.25 crores had already been deposited with the Government. The court acknowledged this fact, directing the petitioner to deposit Rs. 90 crores with the Central Consumer Welfare Fund in two instalments.Issue 7 - TRAN-2 credit:Regarding TRAN-2 credit amounting to Rs. 78.97 crores, the petitioner contested the impugned order, stating that the credit was made available earlier. The court directed the deposit of Rs. 90 crores with a specific timeline and instructed that no coercive steps would be taken if the said deposit was made. Penalty proceedings were to be kept in abeyance, while the investigation would continue.The court allowed for the filing of counter-affidavits and rejoinders within specified timelines, with a re-listing scheduled for a future date. The judgment outlined the directions given considering the amounts in dispute and the actions to be taken by the petitioner to avoid coercive measures.