Respondent violated CGST Act by not passing ITC benefit to buyers. Penalty provision not applicable retrospectively.

The court found the Respondent guilty of not passing on the benefit of additional Input Tax Credit (ITC) to buyers, violating Section 171 (1) of the CGST Act, 2017. The Anti-Profiteering Authority determined the profiteered amount and held the Respondent accountable. However, the penalty under Section 171 (3A) was withdrawn as the provision was not applicable retrospectively to the investigation period.

---

---

Issues:
1. Failure to pass on the benefit of additional Input Tax Credit (ITC) 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.

Issue 1: The case involved the Applicant No. 2, acting as the DGAP, submitting a report stating that the Respondent did not pass on the benefit of additional ITC to buyers, including the Applicant No. 1 and other home buyers. The DGAP highlighted that the Respondent denied ITC benefits amounting to a specific sum for a particular period, indicating profiteering and a violation of Section 171 (1) of the CGST Act, 2017.

Issue 2: The Anti-Profiteering Authority issued a notice to the Respondent after considering the DGAP's report, giving an opportunity to show cause why the report should not be accepted and why liability for violating Section 171 (1) should not be fixed. Subsequently, the Authority determined the profiteered amount and held the Respondent in violation of Section 171 (1) based on the relevant provisions of the CGST Act and Rules.

Issue 3: The Respondent was further notified regarding the imposition of penalty under Section 171 (3A) of the CGST Act, 2017. The Respondent argued against the penalty, citing that the provision was effective prospectively from 01.01.2020, while the investigation period was prior to this date. The Authority acknowledged the absence of penalty provisions during the period of violation and withdrew the penalty notice, dropping the penalty proceedings against the Respondent. The decision was based on the retrospective imposition of penalties not being applicable in this case.

In conclusion, the judgment addressed the failure to pass on ITC benefits, the violation of Section 171 (1) of the CGST Act, 2017, and the subsequent withdrawal of penalty proceedings due to the non-retrospective applicability of penalty provisions during the relevant period.

---