Supreme Court Halts Unsubstantiated Profiteering Probe, Validates Single Project Investigation Under GST Rule 97

SC ruled that the National Anti-profiteering Authority's directive to investigate additional projects against the respondent was unwarranted. The DGAP investigation confirmed the respondent executed only the 'Crescent Bay' Project, with no evidence of profiteering in other ventures. Consequently, the proceedings were dropped, and no further action was recommended against the respondent.

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Issues:
The judgment involves investigation into profiteering by a respondent in projects other than 'Crescent Bay', as directed by the National Anti-profiteering Authority (NAA) under Rule 133 (5) of the Central Goods and Service Tax Rules (CGST), 2017.

Investigation Details:
1. The Director General of Anti-Profiteering (DGAP) conducted an investigation based on the NAA's directions and reported profiteering by the respondent in the 'Crescent Bay' Project.
2. The respondent and M/s Omkar Realtors & Developers Pvt. Ltd. entered into a Joint Revenue Sharing agreement, where the respondent claimed Input Tax Credit (ITC) to pass on benefits to home buyers.
3. NAA directed the DGAP to investigate profiteering in projects other than 'Crescent Bay', suspecting similar contraventions under Section 171 of the CGST Act, 2017.

Investigation Report:
1. The DGAP issued a notice to the respondent under Rule 129 of the CGST Rules, 2017, covering the period from 01.07.2017 to 31.07.2022.
2. Respondent claimed to have executed only the 'Crescent Bay' Project, which was verified through Maharashtra Real Estate Regulatory Authority (RERA) registration.
3. DGAP confirmed that no other projects were undertaken by the respondent, as corroborated by the Deputy Commissioner of State Tax, Govt. of Maharashtra.
4. The Commission found that Section 171 of the CGST Act, 2017 did not apply to other projects of the respondent, as profiteering was only established in the 'Crescent Bay' Project.

Conclusion:
The Commission concluded that no profiteering occurred in projects other than 'Crescent Bay', as investigated by the DGAP and determined by the NAA. Therefore, proceedings against the respondent were dropped, and the order was to be shared with the concerned parties.

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