2020 (10) TMI 671 - HC - GST

Petitioner to Deposit Profiteered Amount in Installments, Interest Stayed

The Court directed the petitioner to deposit the principal profiteered amount in six monthly installments, stayed interest and penalty proceedings, and ... Profiteering - validity of order passed - vires of Section 171 of CGST Act and Chapter XV 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. ₹ 7,53,854/- minus ₹ 35,898/-) in six equated monthly installments commencing 15th October, 2020. List on 3rd November, 2020. Issues:Challenge to final order of NAPA on profiteering, Constitutionality of Section 171 of CGST Act and CGST Rules, Applicability of certain CGST Rules post-transition period, Installment payment request due to COVID-19, Stay on interest and penalty proceedings.Detailed Analysis:1. Challenge to NAPA Final Order:The petition challenges the final order of the National Anti Profiteering Authority (NAPA) dated 16th July, 2020, which held the petitioner liable for profiteering an amount of Rs. 7,53,854 (including GST) during the period from 15th November, 2017 to 30th June, 2019. The petitioner also contests the report issued by the DGAP/Respondent No. 3 on 31st December, 2019. The petition seeks a declaration that Section 171 of the CGST Act and Chapter XV of the CGST Rules are arbitrary, discriminatory, and unconstitutional, violating various Articles of the Constitution of India. Additionally, the petitioner challenges the validity of Rule 123, 129, and 133(3) of the CGST Rules as being ultra vires the CGST Act.2. Applicability of CGST Rules Post-Transition Period:The petitioner further requests a declaration that the aforementioned provisions are not applicable to the post-transition period after 1st July, 2017, arguing that they go against the intended purpose for their introduction under the CGST Act and its rules. The counsel for the petitioner highlights that the profiteered demand amount has already been partially deposited with the Department, including the GST component, and requests permission for installment payments due to the impact of the COVID-19 pandemic.3. Court Directions and Stay on Proceedings:The Court directs the petitioner to deposit the principal profiteered amount in six equated monthly installments starting from 15th October, 2020, as per the orders passed in similar cases. However, the Court stays the interest amount to be paid by the respondents and the penalty proceedings until further orders. The counsels are instructed to submit short written submissions before the next hearing date, scheduled for 3rd November, 2020. The order is to be uploaded on the website immediately, and copies are to be sent to the counsels via email.In conclusion, the judgment addresses the challenges to the NAPA final order, the constitutionality of certain provisions of the CGST Act and Rules, the applicability of rules post-transition period, the installment payment request due to COVID-19, and the stay on interest and penalty proceedings. The Court provides specific directions regarding the installment payments, stays on certain proceedings, and submission of written arguments, ensuring a structured approach to the resolution of the legal issues raised in the petition.