2021 (2) TMI 831 - HC - GST

Delhi High Court grants interim relief in challenge to CGST Act, 2017

The High Court of Delhi granted interim relief in a writ petition challenging the validity of Section 171 of the Central Goods and Services Act, 2017, and ... Profiteering - Vires of Section 171 of the Central Goods and Services Act, 2017 and Rules 122, 126 and 133 of the Central Goods and Services Rules, 2017 - HELD THAT:- Keeping in view the orders passed by this Court in Philips India Limited vs. Union of India [2020 (6) TMI 626 - DELHI HIGH COURT], Samsonite South Asia Pvt Ltd vs. Union of India [2020 (10) TMI 1031 - DELHI HIGH COURT], Patanjali Ayurved Ltd. Vs. Union of India [2020 (7) TMI 614 - DELHI HIGH COURT] and Cilantro Diners Pvt Ltd Vs. Union of India [2020 (8) TMI 570 - DELHI HIGH COURT], subject to the petitioner depositing the entire principal profiteered amount i.e. ₹ 1,04,70,664/- as levied excluding the GST amount already deposited, within four months, in equal monthly instalments, there shall be a stay, as far as the direction for payment is concerned. It is deemed appropriate that the respondents file a reply to the application for interim relief - List on 15th February, 2021. Issues:1. Challenge to the vires of Section 171 of the Central Goods and Services Act, 2017 and Rules 122, 126, and 133 of the Central Goods and Services Rules, 2017.Detailed Analysis:The High Court of Delhi addressed a writ petition challenging the validity of Section 171 of the Central Goods and Services Act, 2017, along with Rules 122, 126, and 133 of the Central Goods and Services Rules, 2017. The court noted that similar petitions with comparable challenges were scheduled for hearing on February 15, 2021. Consequently, the court issued a notice regarding the challenge and accepted the same on behalf of the respondents. Both parties presented their arguments on the matter of interim relief.The court considered previous judgments in cases like Philips India Limited vs. Union of India, Samsonite South Asia Pvt Ltd vs. Union of India, Patanjali Ayurved Ltd. Vs. Union of India, and Cilantro Diners Pvt Ltd Vs. Union of India. In light of these judgments, the court granted a stay on the direction for payment, subject to the petitioner depositing the entire principal profiteered amount, excluding the GST amount already deposited, within four months in equal monthly installments. However, regarding the direction for the reduction of prices, the court directed the respondents to file a reply to the application for interim relief. A separate date for the hearing concerning the direction for price reduction was set for February 15, 2021, with a stay on the said direction until then.In conclusion, the court listed the matter for further proceedings on February 15, 2021, to address the challenges to the specified provisions of the Central Goods and Services Act and Rules. The interim relief granted by the court was contingent upon the petitioner fulfilling the conditions related to the deposit of the profiteered amount, while the direction for price reduction was stayed pending a reply from the respondents and a subsequent hearing on the matter.