TaxTMI 
TaxTMI 
2022 (5) TMI 633
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....ssain, representing Mr.M.Santhanaraman, for the respondents. (i) The petitioner trades in dental equipment and accessories both locally purchased as well as imported. (ii) A complaint was filed by a customer, one Crown Express Dental Labs, alleging that the petitioner had not passed on the benefit of Input Tax Credit (ITC) to it, in regard to purchases made by it from the petitioner. The complaint, dated 06.12.2018 was investigated by R2, who submitted a report on 30.08.2018 to R1/Authority. Based on the report, the Authority vide order dated 28.11.2018 directed the petitioner to remit an amount of Rs.4,78,085/- to the complainant, along with interest at 18%. This order has been complied with by the petitioner. (iii) In order dated 28.11.2018, the Authority also opined that the petitioner might well have profited from transactions of supplies effected by it to other customers, and a direction was thus issued to the DGAP to conduct investigation afresh to unearth further instances of unjust enrichment, if any, that the respondent had engaged in. (iv) The suo moto investigation ordered by the Authority resulted in a report from the DGAP dated 12.04.2019 expressing apprehensio....
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....cordance with the provisions of the Act and these rules. (b) The investigation or enquiry under clause (a) shall be deemed to be a new investigation or enquiry and all the provisions of Rule 129 shall mutatis mutandis apply to such investigation or enquiry." 8. It is clear from the order dated 28.11.2018 passed by the Authority that it had reasons to believe that there had apparently been contravention of the provisions of Section 171(1) of the CGST Act, 2017, in respect of the goods or services or both supplied by the Respondent other than those covered in the report dated 30.08.2018, and hence the DGAP was directed to investigate the same notwithstanding the absence of any recommendation of the Screening /Standing Committee. 9.Accordingly, the Authority directs the DGAP to submit Report under rule 129(6) of the CGST Rules, 2017 covering all the goods and services supplied by the Respondent as a registered person as per the provisions of Section 171(1) of the CGST Act, 2017 and quantify the benefit that the Respondent has failed to pass on to his customers. .........." (vi) Based on the direction as aforesaid, the DGAP submitted report dated 01.07.2020 concluding th....
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....mmissioner - CT (Appeals) (Order No.493 of 2021 dated 18.02.2021), (ii) Rane NSK Steering Systems (P) Ltd Vs. Asstt. (C.C.E (2019) 369 ELT 307), (iii) Huawei Telecommunications (India) Company (P) Ltd Vs. Principle Vs. Principal Commissioner of Customs, Chennai - VII (2017 (356) E.L.T. 506 (Mad) (iv) Kothari Petrochemicals Ltd Vs. Union of India (2015 (316) E.L.T. 17 (Mad) (v) State of Punjab Vs. Bhatinda District Co-Op Milk P.Union Ltd (2007) 217 ELT 325 (S.C.), (vi) Rajhans Impex Pvt. Ltd. Vs. Union of India ((2020) 372 ELT 346), (vii) N.V.K.Mohammed Sultan Rowther & Sons Vs. Additional C.C.E., Madurai ((2019) 365 ELT 516), (viii) Srei Equipment Finance Ltd Vs. Union of India ((2018) 17 GSTL 598), (ix) Webel Technology Ltd Vs. Commissioner of Service Tax, Kolkata ((2018) 19 GSTL 467), (x) Oryx fisheries private limited Vs. Union of India and others ((2010) 13 SCC 427), (xi)Siemens Ltd Vs. State of Maharastra and others ((2006) 12 SCC 33) and (xii) Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai ((1998) 8 SCC 1). 7. The following cases have been cited for the proposition that an amendment is, as a general Rule, expected to operate only prospectively, unless it explicit....
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....d 01.07.2020, before the Authority. He relies, in this regard upon the judgements in Union of India & Anr. Vs. Kunisetty Satyanarayana, ((2006) 12 SCC 28) (ii) State Bank of Travancore Vs. Mathew K.C., ((2018) 3 SCC 85), (iii) CIT Vs. Chhabil Dass Agarwal, ((2014) 1 SCC 603) and Ujjam Bhai Vs. The State of UP (AIR 1962 SC 1621). 13. On merits, learned counsel would urge that the objective of the Antiprofiteering measure is to provide an institutional mechanism to ensure that full benefit of ITC and reduction in rates of GST are passed on to customers. The interpretation of the Rules in question and the determination of its effective date, must be seen in this context. 14. The main object behind the levy of GST is to streamline and rationalize tax levies, both procedurally and substantively, widen the tax base, mitigate cascading and double taxation and to enable better compliance by lowering the overall burden cast upon the customers as well as by ensuring ease of compliance. This was to be one of the steps to pave way for a common national market for goods and services. It is in pursuance of these avowed objects that anti- profiteering measures were introduced, and they must th....
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....od the unjust enrichment as determined by it. The challenge now, is to the widening of the scope of enquiry to include suo moto review from 01.07.2017 with the inception of GST, till date of the complaint. A bird's-eye view of the relevant provisions under the Act and Rules would be useful in this context. 19. Goods and Service Tax has been brought in with effect from 01.07.2017 to pave way for an integrated system of doing business pan India with common protocols and procedures in place for filing of returns and remittance of taxes. Since one of the objectives of the GST law is to aid transparency and the building of a robust economy, Section 171 of the CGST Act provides for a protection against measures for profiteering that may be designed by a supplier of goods and services. Section 171 reads as follows: "171. Anti-profiteering measure - (1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. (2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted und....
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....y the Authority where any request is received in writing from such interested parties. [(2A) The Authority may seek the clarification, if any, from the Director General of Anti Profiteering on the report submitted under sub-rule (6) of rule 129 during the process of determination under sub-rule (1).] [(3) Where the Authority determines that a registered person has not passed on the benefit of the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices, the Authority may order- (a) reduction in prices; (b) return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount including interest not returned, as the case may be; (c) the deposit of an amount equivalent to fifty per cent. of the amount determined under the above clause [along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of d....
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....osit of an amount equal to 50% of the amount profiteered in certain designated funds. He may also contemplate the imposition of the penalty or, as a drastic measure, the cancellation of registration under the CGST Act. 23. Sub-rule (4) says that, notwithstanding that the DGAP may either recommend action or dropping of the investigation, the Authority may, if it is of the opinion that further investigation is called for, refer the matter back to the DGAP to cause such further investigation. Rule 5 (a), further expands the powers of the Authority stating that notwithstanding anything contained in sub-rule (4), if, upon receipt of the report of the DGAP, the Authority has reasons to believe that the assessee has profiteered, it may direct the DGAP to cause investigation or enquiry in that regard. 24.Sub-rule 5 (b) states that the investigation or enquiry under Rule 5 (a) shall be deemed to be a new investigation or enquiry and all the provisions of Rule 129 shall mutatis mutandis apply to such enquiry. There is a difference in subrules (4) & (5) (a), both of which have been inserted with effect from 28.06.2019. Sub-rule (4) provides for the Authority to, dehors the report of the DGA....
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....cts and circumstances of that case. The Bench noted that Section 48 prescribed procedure and thus, even amended, would apply retrospectively in the sense that a procedural provision would, normally apply to all actions after the date it had come into force even though the actions may have begun earlier or the claim upon which the action may be based may be of an anterior date. 31. The relevant paragraphs state thus: "4. The amended S ection.48 came into the Act by Act No. 91 of 1956 from October 22, 1956 and runs as follows: - "48. Recovery of certain sums as arrears of land revenue:-(1) Any sum payable to the Government or to the Custodian in respect of any evacuee property, under any agreement, express or implied, lease or other document or otherwise howsoever, may be recovered in the same manner as an arrear of land revenue. (2) If any question arises whether the sum is payable to the Government or to the Custodian within the meaning of sub-section (1), the Custodian shall, after making such inquiry as he may deem fit, and giving to the person by whom the sum is alleged to be payable an opportunity of being heard, decide the question; and the decision of the Custodian shal....
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.... of GST on 01.07.2017 and with it Section 171, every conceivable effort to contain profiteering must be made be available to the Authorities and the Rules merely arm and equip the officers with the necessary ammunition to address the issue effectively. 33. In Excel Crop Care Limited (supra), the Hon'ble Supreme Court had occasion to interpret the provisions of the Competition Act, 2002. The challenge was to the applicability of the Section 3 of that Act to a notice inviting tenders. Section 3, coming under Chapter II, entitled 'Prohibition of certain agreements, abuse of dominant position and regulation of combinations' specifies the agreements that are prohibited under that chapter. 34. The Competition Act was passed on 13.01.2003, notifying only certain provisions of the Act and Section 3 was notified on 20.05.2009, subsequent to the date of the notice inviting tender, dated 28.03.2009. The petitioner thus argued that Section 3 would operate prospectively w.e.f 20.05.2009 only, and not retrospectively. 35. The respondents/authorities referred to Section 18 that cast a duty upon the Competition Commission of India (CCI) to examine the adverse effects of competition. Thus, and n....
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....plicable to the present case. I disagree. What has weighed with the Hon'ble Bench are the provisions of Section 18, which crystallizes into itself the object of the Act. Section 18 reads as follows: '18. Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country. 38. The provisions of Section 171 of the CGST Act compare well with the spirit and intention of Section 18, though perhaps not the language. The Competition Act addresses anti-competitive agreements and has a laudable purpose behind it. The object is to ensure healthy competition in the market as it is expected to bring about various benefits for the public as well as the economy. This is similar to the Anti-profiteering provision and the spirit ....
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....vestigation process is to be restricted in the manner projected by the Appellants, it would defeat the very purpose of the Act which is to prevent practices having appreciable adverse effect on the competition?). The trigger for assumption of jurisdiction of the CCI is receipt of complaint or information, when the -Commission is of the opinion that there exists a prima facie case? exists (per Section 26 (1)). The succeeding order is administrative (per SAIL); however that order should disclose application of mind and should be reasoned (per SAIL). Upto this stage, with that enunciation of law, no doubt arguably Cadila could have said that absent a specific order as regards its role, by CCI, the DG could not have inquired into its conduct. However, with Excel Crop Care specifically dealing with the question of alleged "subject matter" expansion (in the absence of any specific order under Section 26 (1)) and the Supreme Court clarifying that the subject matter included not only the one alleged, but other allied and unenumerated ones, involving others (i.e. third parties), the issue is no longer untouched; Cadila, in the opinion of this court, is precluded from stating that a specific....