Respondent found guilty of profiteering under CGST Act, 2017 - Penalty waived due to retrospective application.

The Anti-Profiteering Authority found the respondent in violation of Section 171(1) of the CGST Act, 2017 for not passing on input tax credit benefits to buyers, leading to profiteering. The Authority also held the respondent accountable under Section 171(3A) for denying ITC benefits and charging higher prices. However, the penalty imposed under Section 171(3A) was withdrawn as the provisions were not in force during the violation period, emphasizing the penalty's prospective application. The case was closed following this decision.

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Issues:
1. Failure to pass on input tax credit benefits to buyers.
2. Violation of Section 171(1) of the CGST Act, 2017.
3. Imposition of penalty under Section 171(3A) of the CGST Act, 2017.

Analysis:
1. The case involved a complaint by multiple applicants regarding the respondent's failure to pass on the benefit of input tax credit (ITC) to buyers who purchased flats in a specific project post-GST implementation. The Director General of Anti-Profiteering (DGAP) conducted an investigation and found that the respondent did not pass on the ITC benefits amounting to a specific sum during a certain period. This led to allegations of profiteering and violation of Section 171(1) of the CGST Act, 2017.

2. After considering the DGAP's report, the Anti-Profiteering Authority issued a notice to the respondent to explain why the report should not be accepted and why liability for violating Section 171(1) should not be imposed. Subsequently, the Authority determined the profiteered amount and held the respondent in violation of Section 171(1) along with an offense under Section 171(3A) for denying ITC benefits to buyers and compelling them to pay more. A penalty was proposed under Section 171(3A) based on these findings.

3. The respondent contested the penalty imposition citing the prospective nature of the penalty provisions introduced through the Finance Act, 2019, effective from January 1, 2020. The Authority, upon review, noted that the penalty provisions were not in force during the period of violation (July 2017 to September 2018). As a result, the Authority withdrew the penalty notice and dropped the penalty proceedings against the respondent, emphasizing that retrospective imposition of penalties was not permissible. The order was to be supplied to both parties, and the file was to be closed upon completion of the process.

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