TaxTMI 
TaxTMI 
2020 (4) TMI 571
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....had resorted to profiteering in respect of supply of "Dettol HW Liquid Original 900 ml" and had also alleged that the Respondent No. 1 had not passed on the benefit of reduction in the GST rate from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and instead, increased the base price of the above product. The above Applicant also stated that the Respondent No. 1 had supplied "Dettol HW Liquid Original 900 ml" to M/s Big Bazar, Inderlok on 07.11.2017 under Purchase Order (PO) No. 8115009618 with the MRP of Rs. 189/- per unit, on 21.12.2017 under PO No. 4514107805 with the MRP of Rs. 209/- and on 20.06.2018 under PO No. 4518283635 with the MRP of Rs. 192/- and thus he had not reduced the price of the above product commensurately. 2. The DGAP has stated in his above Report that the said application was examined by the Standing Committee on Anti-profiteering in its meeting held on 11.03.2019 and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 (1) of the CGST Act, 2017, it had referred the application to the DGAP for investigation under Rule 129 (1) of the CGST Rules, 2017 to determine whe....
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....f Section 171 of the CGST Act, 2017. 5. The DGAP has further reported that the Respondent No. 1 did not submit the relevant documents as required for the investigation. Therefore, Summons were issued to Sh. Gaurav Jain, Managing Director of the Respondent No. 1 on 19.06.2019 under Section 70 of the CGST Act, 2017 read with Rule 132 of the CGST Rules, 2017 (Annexure-9), to appear before the Assistant Commissioner, Directorate General of Anti profiteering on 27.06.2019 and to produce the relevant documents. In response to the Summons, Sh. Aditya Gupta, authorised representative on behalf of Sh. Gaurav Jain, vide letter dated 27.06.2019 submitted the required documents in respect of the complained product only. 6. The DGAP has also submitted that a letter dated 27.06.2019 was issued to the Respondent No. 1 to submit the details in respect of all the products which were being supplied by him and which had been affected by the GST rate reduction w.e.f. 15.11.2017. The Respondent No. 1 filed a Writ Petition No. 7743/2019, before the Hon'ble High Court of Delhi and the Hon'ble Court vide its orders dated 19.07.2018 (Annexure-10) and 22.08.2019 (Annexure-11) had granted stay on the submi....
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.... the retailer, on which he did not have any control. c. That the pricing to different type of customers was different. The different types of customers were Canteen Stores Department (CSD), Distributors, Direct Modern Trade, E-Commerce Trade, Indirect Modern Trade and Super Stockists. d. That there were cases of return of goods by the customers back to him, for which he had issued credit notes with GST. He requested that the supplies against which credit notes had been issued, should be excluded from the investigation. e. That in respect of the CSD supplies, the prices were negotiated without tax and thereafter taxes prevailing were charged at the time of supply. f. That he had increased the price of the product from Rs. 192/- per unit to Rs. 209/- per unit w.e.f. 01.06.2018 due to commercial reasons such as increase in the rate of Customs Duty, forex rate fluctuations and market forces etc. g. That he had submitted the price trend of the product from September, 2014 and the price of the product was Rs. 170/- per unit in September, 2014, the price was further increased to Rs. 189/- per unit in September, 2016. Thereafter, in September, 2017, the price of the product was i....
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....so submitted that it was important to examine the provisions of Section 171 of the Act and it was clear that in the event of benefit of ITC or reduction in the rate of tax, there must be a commensurate reduction in the prices of the goods or services. Such reduction could only be in terms of money, so that the final price payable by a recipient got reduced commensurate with the reduction in the tax rate or benefit of ITC. This was the only legally prescribed mechanism to pass on the benefit of ITC or reduction in the rate of tax to the recipients under the GST regime and there was no other method which a supplier could adopt to pass on such benefits. 16. The DGAP has further submitted that the Respondent No. 1 had sought to exclude the outward sale of the Goods sold to the CSD from the scope of the present investigation. On examination of the nature of the above sales and the copy of the agreement entered into by the Respondent No. 1, the DGAP has observed that the reduction in the rate of GST w.e.f. 15.11.2017 did not have any impact on the sales mentioned in respect of goods sold to the CSD. 17. The DGAP in his report has also claimed that the Respondent No. 1 had contended tha....
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....or as per invoice no. S170322005 dated 17.11.2017 (I) 240 Total profiteering (J=H*I) 4216.17 19. The DGAP in his report has further mentioned that as per the aforesaid pre and post-reduction GST rates and the details of the outward taxable supplies (other than zero rated, CSD, nil rated and exempted supplies) of the product "Dettol HW Liquid Original 900 ml" during the period from 15.11.2017 to 31.03.2019, as furnished by the Respondent No. 1, the amount of net higher sales realization due to increase in the base price of the product, despite the reduction in the GST rate from 28% to 18% or in other words, the profiteered amount came to Rs. 63,14,901/-. The details of the computation have been furnished by the DGAP in Annexure-24. The said profiteered amount has been arrived at by comparing the average of the base prices of the product "Dettol HW Liquid Original 900 ml" sold during the period from 01.11.2017 to 14.11.2017 differently for different types of customers i.e. CSD, Distributors, Direct Modern Trade, E-commerce Trade, Indirect Modern Trade and Super Stockists, with the actual invoice-wise base prices of such products sold during the period from 15.11.2017 to 31.03.201....
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....Liquid Original 900 ml" sold during the period from 01.11.2017 to 14.11.2017, with the actual invoice-wise base prices of the above product sold during the period from 15.11.2017 to 31.03.2019. The excess GST so collected from the recipients was also included in the aforesaid profiteered amount as the excess price collected from the recipients also included the GST charged on the increased base price. The DGAP has also intimated that on the basis of the details of the outward supplies submitted by the Respondent No. 2, it appeared that the product had been supplied by the Respondent No. 2 in the State of Delhi only. 22. The DGAP has claimed that the allegation of profiteering by way of increasing the base price of the above product when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017 was sustainable against the Respondent No. 1 & 2. 23. The above investigation Report was received by this Authority from the DGAP on 20.09.2019 and was considered in its sitting held on 25.09.2019 and it was decided to accord an opportunity of hearing to the Applicants and the Respondents on 18.10.2019. Notice was also issued to the Respondent No. 1 & 2 directing them to explain why the Re....
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....the online written complaint in its meeting held on 11.03.2019. Hence the examination of the written application and reference to the DGAP by the Standing Committee was beyond the statutory period of limitation prescribed under Rule 128 (1) of the CGST Rules. ii. That reliance has been placed on the judgment of the Hon'ble Supreme Court passed in the case of Chhatisgarh State Electricity Board v. Central Electricity Regulatory Commission and Others (2010) 5 SCC 23 = 2010 (4) TMI 1031 - SUPREME COURT, followed in the case of Suryachakra Power Corporation Limited v. Electricity Department (2016) 16 SCC 152. iii. That since the consideration of the online written complaint by the Standing Committee was barred by limitation, the DGAP could not have investigated the online written complaint in terms of Rule 129 of the CGST Rules, as the DGAP could not consider a complaint without a valid and legal examination and reference by the Standing Committee. In view thereof, the present proceedings were liable to be dropped. d. In the absence of prescription under Section 171 of the CGST Act and/or Rule 129 of the CGST Rules prescribing the period of investigation, the period of 15.11.2017....
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.... was supplied by him to his customers was directly dependent on the final MRP fixed by him. ii. That when the rate of GST was reduced from 28% to 18%, he immediately worked out the benefit that should be passed on to the recipients and accordingly reduced the MRP of the product by 8.1% from Rs. 209/- to Rs. 192/- w.e.f. 24.11.2017 (within 8 days of notification). To support this fact, he has enclosed a copy of the MRP stickers of the first batch of production of the complained product from his factory and a copy of the sticker was also enclosed as Exhibit-7. iii. That explanation of the historical pattern of MRP revision in respect of the complained product was furnished by him as per Table given below:- Sr. No. Valid From Date MRP (in Rs.) Change in MRP(%) 1 30.01.2014 165 - 2 29.09.2014 170 3% 3 02.02.2016 175 2.9% 4 02.09.2016 189 8% 5 01.09.2017 209 10.6% 6 24.11.2017 192 -8.1% 7 01.06.2018 209 8.9% iv. That the MRP of the complained product was Rs. 189/- as on 31.08.2017. In the routine course, he had increased the MRP of the complained product to Rs. 209/- w.e.f. 01.09.2017 (i.e. 75 days before the date of rate reduction notification date....
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.... DGAP could have taken the period upto 31.03.2019 for the purpose of the investigation, the DGAP ought to have taken into consideration the increased BSP consequent to the increase in the input costs. ix. That the DGAP has used mechanical manner of taking the average supply value of the product (for period 01.11.2017-14.11.2017) and compared the same with the invoice value (15.11.2017 to 31.03.2019). That the DGAP had followed an incorrect and illegal approach to calculate the alleged profiteering. Thus. the demand in respect of alleged profiteering insofar as the same pertained to the price increase w.e.f. June 2018 was not sustainable. Assuming even if the period of investigation was not taken into consideration, but the price hike on the complained product (w.e.f. 01.06.2018), was given benefit, the alleged profiteering would get reduced to Rs. 15,76,325/-. f. The DGAP had taken an average of price of complained product for calculating pre-GST Base Selling Price, but not for post-GST rate reduction, Base Selling Price:- i. That Section 171 of the CGST Act or Chapter XV of the CGST Rules did not prescribe the methodology or guidelines for passing on the commensurate reducti....
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....aring the average base prices had considered all the invoices for the relevant period. Such invoices also contained cases where the product was not finally supplied and was returned to the Respondent No. 1. As the same did not form part of supplies undertaken by the Respondent No. 1, they should be excluded from the calculation of the alleged profiteering amount. iii. That if the above contention was taken into consideration, the alleged profiteering amount would further stand reduced by Rs. 37,411/- to Rs. 7,60,868/-. An Excel sheet showing the calculation in this respect has been enclosed as Exhibit-11. h. Supplies made to 'Institutional Distributor' Channel Partner were based on contractual and negotiated prices (excluding the taxes). The same could not be considered for the purpose of present calculation by DGAP:- i. That the supplies made by Respondent No. 1 to Institutional Distributor Channel Partners were liable to be excluded from the scope of investigation as the price for the said supplies was contractual and the same was negotiated excluding taxes and thereafter taxes (as applicable at the time of sale) were applied thereon. Therefore, in such cases, the change in....
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....rate GST registrations. The investigation conducted by the DGAP was in respect of all the GST registrations of the Respondent No. 1 located all over India, details of which were also furnished by the Respondent. j. That he had undertaken various measures to pass on the benefit to his recipients including MRP reductions, extension of the period of existing promotional schemes, addition of higher grammage on free of cost basis and higher post supply price reduction (discounts) etc. k. That he had undertaken the activity of changing the MRP of the affected product. The process of MRP change had started in the month of November, 2017 itself immediately once the notification regarding rate reduction was notified. However, as the old MRP printed on inventory phased out and the fresh stock with reduced MRP became ready, he started to hit shelves from the latter part of November, 2017. I. In the absence of methodology prescribed in the CGST Act or Chapter XV of the CGST Rules for calculation of profiteering, the procedure adopted by the DGAP in his Report was arbitrary and subjective:- i. That in the absence of machinery provisions vesting powers and prescribing the mechanism and m....
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....natural justice. v. That in order to the control rise in inflation on account of implementation of GST, the Malaysian Government had introduced the 'Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations 2014, which provided for the mechanism to calculate whether any company had profiteered on account of GST or not. The anti-profiteering measures in Australia revolved around the 'Net Dollar Margin Rule' serving as the fundamental principle as guideline i.e. if the new GST regime caused taxes and costs to fall by $1, then prices should fall by at least $ V-. At the same time if the cost of the business rose by $1 under the new tax regime, then prices might rise by not more than $1. These regulations had been set as barometers for calculating profiteering. However, no such procedure for calculation of profiteering had been provided under the CGST Act and CGST Rules and even this Authority had not prescribed any such mechanism in the exercise of its powers under Rule 126 of the CGST Rules. Absence of the same violated the principle of natural justice and thus, the investigation was liable to be set aside. vi. That in t....
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....t role. The intention of the legislature must be, as is well known, gathered from the words used in the statute at the first instance and only when such a rule would give rise to anomalous situation, the court may to recourse to purposive construction. It is also a well settled principle of law that casus omissus cannot be supplied." iii. That as per the various principles laid down by the Hon'ble Supreme Court in a large number of judgments, it was clear that (a) principles of strict/literal interpretation applied to charging provisions of the taxation statutes (b) cause/ reasoning for a particular provision of law, could not be supplied, unless there was a clear lacuna and only when reasons for such assumption of cause were found within the four corners of the statute, (c) cause/intention could be supplied only if, literal/strict interpretation led to an absurd or anomalous situation. However, in the present case, there was no basis for the DGAP to assume that "commensurate reduction" used in Section 171 of the CGST Act would only mean, only in cash. The finding of the DGAP in this regard was erroneous. Methods like increase in quantity or grammage of goods supplied, introducti....
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.... complained product with reduced MRP was commenced on 24.11.2017 and thereafter it was supplied with reduced MRP (base price) to the distributors and other channel partners. On the date of GST rate reduction i.e. 15.11.2017, the Respondent No. 1 had closing stock lying at various locations with the old MRP and the complained product was MRP driven. Accordingly, the Respondent No. 1 had to work on the computation of the revised MRP for the complained product as well as other goods (mostly MRP driven) and thereafter re-fix the prices for all his customers, in order to pass on the commensurate reduction in the applicable rate of tax. Further, the number of goods dealt by the Respondent No. 1 was high and the entire process had consumed around 7 days after the GST rate reduction. In the meantime, since there could be a shortage in the market, the Respondent No. 1 for the interim continued to supply the complained product with the same MRP. The Respondent No. 1 was informed that if he passed the commensurate reduction in applicable taxes, the requirement of Section 171 of the CGST Act would be met. v. That the benefit of rate reduction was passed on to the consumers by way of an addit....
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....unt equivalent to GST on the profiteered amount to the CWF. iii. That addition of 18% GST would have been correct if the amount had been collected and retained by him and not deposited with the Government. In this regard, reliance was placed on the case of R. S. Joshi Sales Tax Officer Gujarat v. Ajit Mills Limited (1977) 4 SCC 98, wherein the Hon'ble Supreme Court analysed what the term 'collected' meant in the context of the sales tax legislation of Gujarat. It observed as under:- "34. Section 37 (1) uses the expressions, in relation to forfeiture any sum collected by the person - shall be forfeited'. What does collected' mean here? Words cannot be construed effectively without reference to their context. The setting colours the sense of the word. The spirit of the provision lends force to the construction that 'collected" means "collected and kept as his" by the trader. If the dealer merely gathered the sum by way of tax and kept it in suspense account because of dispute about taxability or was ready to return if eventually it was not taxable, it is not collected. 'Collected., in an Australian Customs Tariff Act, was held by Griffth C.J., not .to include money deposited unde....
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....ompute the profiteering amount has already been discussed in detail, in the DGAP's Report dated 19.09.2019. However, this Authority may take a view regarding the period of investigation in the present case. iii. That he had excluded the transactions against which credit notes had been issued. The terms and conditions in respect of the supplies made to the CSD and Institutional Distributors were completely different and therefore, the supplies made to the Institutional Distributors were not excluded from the scope of investigation. iv. That the provisions of Section 171 of the Act did not provide for any means of passing on the benefit of reduction in the rate of tax or benefit of ITC other than by way of commensurate reduction in the prices. The claim made by the Respondent No. 1 that he had passed on the benefit of GST rate reduction on certain products by increasing the quantity of grammage of the products while maintaining the earlier pre-rate reduction MRP of such products was not acceptable. v. That the DGAP has computed the profiteered amount by comparing the average of the base price of the product sold during the period from 01.11.2017 to 14.11.2017 with the actual in....
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....eering amount. The DGAP had considered all the invoices while computing the profiteering amount. Some of the invoices also pertained to the cases where the product was not finally supplied and was returned. Since, the returned product did not form part of the supplies made by the Respondent No. 1, the same should be excluded from the alleged profiteered amount. v. That the CGST Act or Chapter XV of the CGST Rules did not prescribe the methodology or approval for computation of profiteering. vi. That the DGAP had not applied the principle laid down by this Authority that the grammage increase was an acceptable form of passing on the commensurate reduction in prices as has been accepted by this Authority in the case of Ankit Kumar Bajoria V. Hindustan Unilever (20/2018). vii. That the amount charged as GST from the customers had been deposited with the Government and hence, the same was needed to be reduced from the profiteered amount. 29. The Respondent No. 1 vide his submissions dated 15.01.2020 has further stated:- i. That he had undertaken various measures to pass on the benefit to his recipients including MRP reduction, addition of higher grammage on free of cost basis ....
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....o in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered: PROVIDED that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority. Explanation:- For the purpose of this section, the expression "profiteered" shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both." 32. It is apparent from the DGAP's Report that there has been reduction in the rate of tax from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and the above product was impacted by the rate reduction and hence, the benefit of the rate reduction was required to be passed on to the customers by the Respondents. It is also revealed that the DGAP vide his report dated ....
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....from a member of Local Circles. Local Circles is India's leading Community Social Media Platform". A copy of the complaint received from Sh. Anil Mehta, a member of the Local Circles, was also attached with the e-mail which stated as under:- "Profiteering Complaint against Reckitt Benckiser/Dettol Have also received information from Big Bazaar on Dettol or Reckitt Benckiser which indicates another profiteering scenario. Handwash dettol HW Liquid original 900 ml was sold to Biq Bazaar Inderlok on 7/11/17 via PO 8115009618 for MRP 189. Then after Nov 15 GST rate reduction from 28% to 18% on MRP 209 on 21/12/17 via PO 4514107805. On 20/6/18 same product supplied via PO 4518283635 for MRP 192. So net net after 10% GST rate cut the manufacturer instead of reducing the MRP of product actually increased it and engaged in profiteering according to me." (Emphasis supplied) 34.This Authority in the proceedings being held by it in the case of M/s J. K. Helen Curtis Ltd. and another, on the complaint dated 30.07.2018 filed by the Applicant No. 1, had opportunity to examine the record of the meetings of the Standing Committee held on 07.08.2018 and 08.08.2018 when the present complaint....
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.... the Committee held on 07.08.2018 and 08.08.2018 and hence, the proceedings in respect of the above complaint had come to an end w.e.f. 08.08.2019. It is also revealed from the record that the above Applicant had made a fresh complaint to the Standing Committee vide his e-mail dated 22.02.2019 which was considered by the above Committee in its meeting held on 11.03.2019 i.e. after a lapse of a period of 17 days which is well within the period of limitation of 2 months prescribed under Rule 128 (1) of the CGST Rules, 2017 and was referred to the DGAP for detailed investigation as per Rule 129 (1) of the above Rules. Therefore, the allegation of the Respondents that the above complaint was not recommended by the Standing Committee within the prescribed period of limitation is not correct and hence the same cannot be accepted. 37. The Respondent No. 1 has also placed reliance on the judgment passed by the Hon'ble Supreme Court in the case of Chhatisgarh State Electricity Board v. Central Electricity Regulatory Commission and others (2010) 5 SCC 23) which has been followed in the case of Suryachakra Power Corporation Limited v. Electricity Department (2016) 16 SCC 152), in his support....
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....to the fixing of prices of the products which the Respondent No. 1 is free to fix. If there was any increase in his costs he should have increased his price before 15.11.2017 however, it cannot be accepted that his costs had suddenly increased on the intervening night of 14.11.2017/15.11.2017 when the rate reduction had occurred which had forced him to increase his prices exactly equal to the reduction in the rate of the tax. Such an uncanny coincidence is unheard off and hence there is no doubt that the Respondent has increased his price for appropriating the benefit of tax reduction with the intention of denying the above benefit to the consumers. 40. The Respondent No. 1 has also argued that he had immediately worked out the benefit to be passed on to the recipients and accordingly reduced the MRP of the product by 8.1% from Rs. 209/- to Rs. 192/- w.e.f. 24.11.2017. However, perusal of Table-A of the DGAP's Report shows that the above Respondent was selling the above product at the total price of Rs. 161.85 per unit including the GST between the period from 01.11.2017 to 14.11.2017, during the pre-rate reduction period and he was selling it (c) Rs. 179.41 per unit after the rat....
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....turn for the period from 01.11.2017 to 14.11.2017, submitted by the Respondent No. 1 himself. The DGAP has computed the average pre rate reduction base price as the Respondent No. 1 was not selling his product on a single base price and was charging different prices from different channels of distribution viz. CSD, Distributors, Direct Modern Trade, E-Commerce Trade, Indirect Modern Trade and Super Stockists. The DGAP has computed the average base price for each of the above channels separately for computation of profiteering. It was also not possible to compare the actual pre rate reduction price with the post rate reduction actual price for every customer as the same customer may not have bought the product either during the pre or the post reduction period. The DGAP has further calculated the average base price of the product by considering a short period of 14 days which gives more accurate and representative pre rate reduction average price. The DGAP was also required to compare the pre rate reduction average base price with the actual post rate reduction price as the benefit was required to be passed on to each buyer and it could not have been calculated by computing the aver....
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.... not excluded from the scope of investigation. In this connection it would be relevant to note that an Institutional Distributor cannot be compared with the CSD as the former is a normal commercial channel whereas the later is dedicated to the welfare of the personnel of the Armed Forces. Moreover, mere charging of reduced rate of tax does not amount to passing of the benefit of tax reduction when the base price of the product has been increased by the Respondent to offset the benefit of tax reduction. Any negotiation or agreement executed by the Respondent while fixing prices with the Institutional Distributor Channel Partners cannot override the provisions of Section 171 (1) and hence, the Respondent is legally bound to pass on the benefit of tax reduction. Therefore, the DGAP has rightly included the supplies made to the Institutional Distributor Channel Partners while computing the profiteered amount, hence the contention of the Respondent made in this regard is not correct and accordingly, an amount of Rs. 2,30,335/- as per Exhibit-13 cannot be excluded from the profiteered amount. 45.The Respondent has further contended that Section 171 of the CGST Act or Chapter XV of the C....
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....e which is based upon the above parameters and hence it would vary from product to product or unit to unit or service to service and hence no fixed methodology can be prescribed to determine the amount of benefit which a supplier is required to pass on to a recipient or for computation of the profiteered amount. However, to further explain this legislative intent behind the above provision, this Authority has been empowered to determine the 'Procedure and Methodology' which has been done by it vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017. However, no fixed mathematical formula which can be applied in all the cases of profiteering can be fixed while determining such a "Methodology and Procedure" as the facts of each case vary. In the case of one real estate project, date of start and completion of the project, price of the house/commercial unit, mode of payment of price, stage of completion of the project, rates of taxes, amount of ITC availed, total saleable area, area sold and the taxable turnover realised before and after the GST implementation would always be different than the other project and hence the amount of benefit of additional ITC to be....
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....nd hence the same cannot be accepted. The Respondent cannot deny the benefit of tax reduction to his customers on the above untenable ground as Section 171 provides clear cut methodology and procedure to compute both the above benefits. 46.The Respondent has also alleged that the DGAP has used subjective methodology and procedure to determine the alleged profiteering amount which was illegal. In this connection it is mentioned that the DGAP has computed the amount of benefit which has been denied by the Respondent by using the methodology which has been discussed in para supra and has been repeatedly approved by this Authority in all such cases and hence, the Respondent cannot claim that the DGAP has devised his own methodology and procedure. 47.The Respondent has also contested that the Methodology and Procedure issued by this Authority on 19.07.2018 only provided the procedure pertaining to investigation and hearings. However, as has been mentioned supra the 'Methodology & Procedure' to determine profiteered amount has already been provided in Section 171 (1) itself and hence, no Methodology & Procedure is required to be determined by this Authority separately. This Authority h....
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....nd hence it cannot be accepted. 49.The Respondent has also relied upon the judgements passed by Hon'ble Apex Court and the Hon'ble High Courts of Allahabad and Madras in the cases of Commissioner of Income Tax Bangalore v. B. C. Srinivasa Setty (1981) 2 SCC 460, Samsung (India) Electronics Pvt. Ltd. v. Commissioner of Commercial Taxes U. P. Lucknow 2018 [11] G.S.T.L. 367 and Eternit Everest Ltd. v. UOI 1997 (89) E.L.T. 28 (Mad.) and claimed that in the absence of the machinery provisions the provisions of Section 171 could not be implemented. In this connection it is stated that no tax has been imposed under Section 171 and hence no machinery or methodology and procedure is required to be framed separately under Section 171 as it itself prescribes such methodology and procedure. Moreover Rule 122 of the CGST Rules, 2017 provides for constitution of this Authority for determination whether the benefits of tax reduction or ITC have been passed, Rule 123 provides for the constitution of the Screening and Standing Committee on Anti-Profiteering to prima facie look in the complaints made under Section 171 (1) and Rule 129 stipulates creation of the office of DGAP to carry out detailed ....
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.... of any advertisement or notice vide which the customers were informed that he was passing on the benefit of tax reduction by supplying additional quantity of the above product. In the absence of the above details the claim of the Respondent made on this respect is frivolous and hence the certificate issued by the Chartered Accountant cannot be relied upon. 52. Reliance has also been placed by the Respondent No. 1 on the order passed by this Authority in the case of Ankit Kumar Bajoria vs. M/s Hindustan Unilever Limited 2019 (21) GSTLJ 74 (N. A. P. A.) wherein this Authority has accepted the argument of additional grammage being a correct way of passing on the benefit of tax reduction in terms of Section 171 of the CGST Act, 2017. Perusal of the above cited order shows that onetime benefit of grammage was allowed to M/s Hindustan Unilever Limited as it had provided the complete details regarding the passing on of the benefit by way of increase in grammage. However, in the present case the Respondent No. 1 has not submitted any information regarding the benefit passed on by way of increase in additional quantity as has been mentioned in para supra. He has also not supplied any evi....
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....f the provisions of Section 171 (1) of the above Act as he has denied the benefit of tax reduction to his buyers by charging excess GST. Had he not charged the excess GST the customers would have paid less price while purchasing the above product from the Respondent and hence the above amount has rightly been included in the profiteered amount as it denotes the amount of benefit denied by the Respondent No. 1 as price includes tax also. The above amount can also not be ordered to be transferred to the CWFs as the Respondent No. 1 has deposited it in the Government Treasury and it can be refunded only to the Respondent if he is found eligible to claim it. The above amount has to be deposited in the CWFs as the buyers are not identifiable as per the provisions of Rule 133 (3) (c). Therefore, the above contention of the Respondent No. 1 is untenable and hence the same cannot be accepted. 55. The Respondent No. 1 has relied upon the case of R. S. Joshi Sales Tax Officer Gujarat v. Ajit Mills Limited (1977) 4 SCC 98 in this regard, wherein the Hon'ble Supreme Court had analysed what the term 'collected' meant in the context of the sales tax legislation of Gujarat. However, in view of t....