Court Notice: Respondents to File Counter-Affidavits, Petitioner to Deposit Profiteered Amount

The Court issues notice to the respondents, directs filing of counter-affidavits within two weeks, and orders the petitioner to deposit the profiteered amount in six installments starting from 15th October, 2020. Payment of interest by respondents is stayed. The next hearing is scheduled for 3rd November, 2020, with counsels instructed to submit written submissions.

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Issues:
Challenge to final order of National Anti-Profiteering Authority (NAPA), constitutionality of Section 171 of CGST Act and Rules 126, 127, and 133 of CGST Rules, constitutionality of NAPA under Rule 122 of CGST Rules.

Analysis:
The petition challenges the final order of NAPA dated 27th February, 2020, alleging profiteering of Rs. 37,85,342 during a specific period. The petitioner seeks a writ of prohibition against coercive actions based on the order. Additionally, a declaration is requested regarding the unconstitutionality of Section 171 of CGST Act, along with Rules 126, 127, and 133 of CGST Rules, citing violations of various articles of the Constitution. The constitutionality of NAPA under Rule 122 of CGST Rules is also contested on similar grounds.

The petitioner's counsel argues that the profiteered demand calculation by NAPA compared average prices with actual sale prices, leading to discrepancies due to some invoices being higher than the average. It is contended that a channel partner comparison would have shown GST reduction passed on in all cases. Furthermore, due to the COVID-19 pandemic, the petitioner requests permission to deposit the alleged amount in installments.

The Court issues notice to the respondents, with their advocates accepting the same. 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 profiteered amount in six installments starting from 15th October, 2020. The payment of interest by the respondents is stayed until further orders. Counsel for both parties are instructed to submit short written submissions before the next hearing scheduled for 3rd November, 2020, along with related matters.

The order is to be uploaded on the website immediately, and a copy is to be sent to the counsels via email.

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