TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 67
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....e, are that a reference was received on 30.08.2018 by the DGAP from the Standing Committee on Antiprofiteering to conduct a detailed investigation under Rule 129 of the Rules 2017, based on two applications dated 17.072018 and 12.05.2018 filed by Applicant No. 1 and Applicant No. 2 respectively in respect of the purchase of fiats in the Respondent's project "Zara Aavaas" (hereinafter referred to as "the Project") located at Gurugram. Haryana. forwarded by the Haryana State Screening Committee on Anti-profiteering. under Rule 128 of the Rules 2017, wherein it prima facie observed that Section 171 Of the Central Goods and Services Tax Act, 2017 had been contravened. 2. The DGAP had issued a Notice dated 12.09.2018 under Rule 129 of the CGST Rules 2017, calling upon the Respondent to reply as to whether he admitted that the benefit of input tax credit had not been passed on to the Applicant No. 1 and Applicant No, 2 by way of commensurate reduction in prices and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all supporting documents. 3. Later on, 14 (fourteen) more applications filed by Sh. Rohit Choudhary (ap....
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....profiteering was for only those fiats where demands have been raised or payments have been received in the post-GST period. It was further claimed that if the ITC in respect of the unsold flats or the flats in respect of which no consideration has been received in the post-GST period, was taken into account to calculate profiteering in respect of the flats where payments were received in the post-GST period, the ITC as a percentage of turnover would be distorted and erroneous. therefore, the profiteering in respect of the remaining 12 units should be calculated when the consideration was received in the post-GST period. by taking into account the proportionate ITC in respect of these 12 units. It was also noted that since the construction service was being provided by the Respondent under affordable housing, which was exempted from the Service Tax in terms of Notification No. 25/2012 ST dated 20.06.2012 as amended vide Notification No. 09/2016-ST dated 01.03.2016, the Respondent was not eligible to avail Cenvat Credit on Service Tax and Central Excise Duty paid on input services, inputs. and capital goods. Moreover. as the Respondent was paying VAT @ 1% under the Haryana VAT compos....
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....action, was extended up to the 30th day of June 2020 including for furnishing of any report under the provisions of the Central Goods and Service Tax Act. 2017. Subsequently. given the Notification 55/2020, Central Tax dated 27.06.2020. the time limit stood extended till 31.082020. c) the period covered by the current investigation is from 01.07.2017 to 31.03.2019. d) in response to his above-said letter dated 18.12.2019. the Respondent has furnished his replies vide letters/e-mails dated 15.01.2020. 04.02.2020, 06.02.2020, 26.02.2020. 0203.2020, and 03.03.2020 wherein he has provided the following documents/information: i. List of home-buyers. ii. Month-wise details of Demand Raised. iii. Reconciliation of demands with GST returns. iv. Copies of GSTR from July 2017 to November 2019. v. Summary of ITC availed which was not available earlier. vi. Details of tax paid on purchases of Cement. Steel. and other items in pre-GST and post-GST period. vii. Details of Contractor and taxes paid to them in pre-GST and post-GST period. viii. Details of GST benefits passed on to the Home-buyers through Credit Notes. ix. Copies of invoices of Cement, Steel, and Contractors i....
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....as getting in the pre-GST and Post-GST periods along With the rate of taxes that he was paying in the Pre-GST and Post-GST periods. The summary of the maximum ITC benefit that he was not getting earlier and which he was getting now is reproduced hereunder:- Therefore. even if he was required to pass on the benefit. the maximum amount would have been Rs. 2,19,63.251/- as calculated above. (e) The Respondent furnished a table explaining the ITC benefit which was not available earlier and has now become available in the GST regime. Particular Amount in Rs. Total Amount of ITC Claimed by the company during the period 1st July to 31st August 2018 4,77,91,565.00 Total Amount of Excess GST paid to the supplier in Post GST Regime (which is not a benefit to be passed). It is the extra amount that has been paid to the supplies. 2,58,28,314.00 Total Amount if ITC benefit which was not available to the Respondent earlier and which has been now been available 2,19,63,251.00 Thus, in both the workings the ITC benefit worked out to be Rs. 2,19,63,251/- (f) He has passed on the benefit of Rs. 1,95,09,613/- in the month Of October 2018, to the customers and issued credit notes in r....
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....t's submissions that under the same registration there were two projects in the period covered under investigation and in light of Notification No. 03/2019-CentraI Tax (Rate) dated 29.03.2019 he had opted for the 1% GST scheme for affordable housing. The second project "Zara Awas-2" had been registered With RERA on 01.04.2019. So. the second project was outside the purview of Anti-profiteering provisions as it was launched not only after the introduction of GST but also there is no benefit of Input Tax Credit in this project. 13. The DGAP has reported that para 5 of Schedule-III of the Central Goods and Services Tax Act, 2017 (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of budding" Further. clause (b) of Paragraph 5 of Schedule II of the Central Goods and Services Tax Act, 2017 reads as "(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended (or sale to a buyer. wholly or partly, except where the entire consideration has been received after issuance of completion certific....
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....s home-buyers, The sample invoices were found to be in order; however the DGAP could not incorporate them as the period covered under the impugned Report of DGAP covered the period only up to August 2018. 15. The DGAP has further reported that in the pre-GST era, since the service of construction of affordable housing, provided by the Respondent, was exempt from Service Tax, as per Notification No. 25/2012-ST dated 20.06.2012, as amended by Notification No. 9/2016-ST dated 01.03.2016, he was not eligible to avail credit of Central Excise Duty paid on inputs/capital goods or Service Tax paid on input services. Further. since the Respondent was paying VAT under Haryana VAT Composition Scheme @ 1%, he was not eligible to avail credit of VAT paid on inputs, whereas in the post-GST period, he was eligible to avail input tax credit of GST paid on inputs and input services including on the sub-contracts. The DGAP has worked out the ratios of input tax credit to turnover during the said period as below:- 16. The DGAP has also reported that as per the Table above, the input tax credit as a percentage of the total turnover that was available to the Respondent during the pre-GST period (Apr....
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....recipients. 19. The DGAP has further submitted that the Respondent during the course of hearing before this Authority, vide submission dated 25.07.2019 had stated that he had passed on the benefit of input tax credit to the home-buyers by way of issuing Credit Notes and not charging GST from his customers in their last demand raised in October 2019. He submitted details of Credit Notes to the tune of Rs. 1,95,09,694/-, issued to 797 home-buyers. However, on perusal of the data, the DGAP has noticed that out of these 797 home-buyers. 9 buyers have cancelled their booking, and hence they had been excluded. also, no details of benefit passed on to 16 Other home-buyers could be found. Accordingly, the total quantum of benefit passed on to the home-buyers was found to be Rs.1,88,56,367/- to 772 home-buyers. The benefit so passed on in the form of credit notes on GST from the customers, has been subsequently deducted from the respective home-buyers to arrive at the final amount of profiteering. The same has been verified by the DGAP from the data submitted. random verification of demand letters issued by the Respondent. and credit notes issued. Accordingly. the amount of profiteering, i....
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....utation of profiteering was with respect to those fiats only where demands had been raised or payments had been received in the post-GST period, and which were not cancelled as of 31.03.2019. If the input tax credit in respect of the unsold flats from whom no consideration has been received is taken into account to calculate profiteering in respect of the flats where payments have been received post GST, the input tax credit as a percentage of turnover would be distorted and erroneous. 23. In view of the above discussion, the DGAP has concluded the benefit of additional input tax credit to the tune of 6.55% of the turnover, accrued to the Respondent post-GST, and the same was required to be passed on to the Applicants and Other recipients during the period 1.07.2017 to 31.03.2019. Such ITC amounted to Rs.4,74,88,840/-. On verification it was ascertained by the DGAP that, the Respondent had passed on benefit amounting to Rs, 1.88.56.367/, by way of Credit Notes to 772 recipients of supply/home buyers. The DGAP reported that after allowing deduction of such benefit already passed on, it is found that. the Respondent has realized an additional amount to the tune of Rs. 34,418/- each ....
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....vailable to him Post-GST. (e) based on his estimation. he had passed on the benefit to his homebuyer customers and he agrees to pass the balance credit, if any, based on actual working in line with Section 171 of the CGST Act. (f) the DGAP computation was much more than the actual benefit that had accrued to him since it has been worked out on basis of the proportionate demands raised by him, That the methodology adopted by DGAP is arbitrary as it completely ignores the actual working of goods and services utilized by him in the Pre-GST and Post-GST periods. (g) the DGAP in his Report dated 28th August 2020 has improperly and baselessly computed the profiteered amount. completely ignoring his submissions without considering the details of actual rates of tax of various items/ inputs provided by him. Based on the data provided by him, the ITC benefit which needs to be passed on by him works out to Rs.2,08,64,938/- while the ratio of ITC Benefit to Turnover works out to 2.57%, out of which he has already passed on Rs.1,88,56,365/- to his customers. However, the DGAP has calculated the profiteered amount to be Rs.4,74,88,840/- which is baseless and incorrect. ignoring the amount....
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....CT) 18% 242% Other Items - 5% Approx. 18/28% 400% (k) the DGAP ought to have considered the following data while making the computation:- (I) therefore, accordingly the maximum amount that he could have been required to pass on as ITC benefit works out to be Rs. 2,19.63,251/-, as calculated above. based on the understanding that the increase in the rate of taxes paid by him to his suppliers should be deducted while calculating the amount of profiteering. (m) that at the time of making his submissions before the DGAP, he was under the impression that in the pre-GST regime. he was covered under the composition scheme under VAT, and that there was no service tax on Affordable Housing. Therefore, he had not been Claiming input tax credit of VAT as well as the credit Of Service Tax. However, as per his VAT assessment order received in the month of March 2020. he has been asked to pay VAT and has thus also claimed ITC Rs. 11,55,572/- pertaining to the pre-GST period. (n) based on his above submissions, a revised worksheet was put forth by the Respondent. 25. The Applicant No. 2 submitted his reply vide submissions dated 01.10.2020, in response to the DGAP's Report 28....
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....him as per the provisions of GST law and there is no provision in Section 171 of the CGST Act, 2017 to issue such directions to any registered person. Hence, it appears that the contention of the Applicant no. 2 is not as per Section 171 of the CGST Act, 2017. (iii). With respect to the submission dated 08.10.2020 of Applicant No, 1, the DGAP has clarified that in the pre-GST period 1% VAT was payable while in the post-GST period, GST was payable on inputs that were allowed as a credit to Respondent In his report dated 28.08.2020, the DGAP reported that the profiteering done on higher Input Tax Credit availed should be passed on to the buyers. (iv). With respect to the submissions dated 07.10-2020 of the Respondent, the DGAP has submitted his point-wise clarification as under: (a). on the contentions of the Respondent that the DGAP'S report should not be accepted. as it is not based on actual calculation provided by him. the DGAP has stated that his Report was fully based on the data submitted by the Respondent and also the methodology adopted by him to derive the additional benefit of ITC in the post-GST period. i.e. profiteering had been enumerated in detail in the inve....
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....f Haryana VAT policy, no VAT was charged from homebuyers. The Respondent had categorically submitted that he had opted for the Composition Scheme of 1% VAT in Haryana VAT for his project and these facts were also reported in the Report dated 28.08.2020 under Rule 133(4) of CGST Rules, 2017. Now the Respondent is stating that as per the VAT Assessment Order he should be allowed to avail the benefit of VAT which is against the statutory requirement under the Haryana Value Added Tax Act. 2003 as amended. Hence, the contention of the Respondent may not be accepted. 29. On receipt of the above Supplementary Report dated 18.11.2020 of the DGAP. this Authority vide Order dated 07.12.2020. forwarded the same to the Applicants and Respondent directing them to file consolidated written submissions and also fixed a Hearing. 30. According to the above-said Order dated 07.12.2020 of this Authority, the Applicant No. 1 has furnished his submissions dated 30.12.2020 and 08.02.2021. Stating that as per DGAP's Report dated 28.08.2020. the Respondent has not availed ITC during the period from April 2019 to November 2019 as he has opted New Scheme but it is to be mentioned that the OC of the pr....
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.... Act is ultra vires of Article 246A of the Constitution of India. Article 246A according to which the GST is being levied under the CGST Act only provides for legislation concerning goods and services tax on supply of goods or services or both therefore. insofar as the provisions of Section 171 seek to fix prices at Which the goods and services ought to have been supplied is beyond the scope and ambit of Article 246A, apart from unreasonably interfering with the right to trade. Therefore, Section 171 is beyond the scope and ambit of Article 246A and Article 19 (I)(g) and accordingly ultra wires the Constitution of India. (c). he has further claimed that the CGST Act, the CGST Rules, and the NAA Methodology and Procedure do not prescribe any methodology or guidelines by which profiteering can be computed under Section 171 of the CGST Act. The only requirement under Section 171 (I) of the CGST Act is that the benefit of any tax rate reduction/ benefit of ITC shall be passed on to the recipient by way of a "commensurate reduction in prices" and to date, neither the CGST Act nor the CGST Rules nor any other form of delegated legislation, has prescribed any method of computation by whi....
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....he methodology and procedure for determination of profiteering under Section 171 of the CGST Act, the same is beyond the scope of Section 171 read with Section 164 of the CGST Act Therefore, Rule 126 of the CGST Rules is unconstitutional for being in excess of its parent statutory provisions because it is a well-settled position of law that delegated legislation cannot go beyond the statutory provisions and Reliance has been Placed in this regard on the judgment of the Hon'ble Supreme Court in case of Bimal Chandra Banerjee v. the State of MP, 1970 (2) SCC 467. He has also submitted that in the case of Union of India v. Intercontinental Consultants and Technocrats Private Limited, (2018) 4 SCC 669, the Hon'ble Supreme Court observed that "It is trite that rules cannot go beyond the statute". Given the above judgments, he has submitted that such sub-delegation under Rule 126 of the CGST Rules beyond the scope of statutory provisions is illegal, without jurisdiction, and is unconstitutional. Without prejudice to the submissions made elsewhere, he has submitted that various provisions of this Authority's Methodology and Procedure are completely beyond the scope of its parent s....
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....n the total amount of alleged profiteering liability and without prejudice to the submission that the provisions of Section 171 of the CGST Act have not been contravened. it is submitted that any amount of GST collected by him has been duly paid to the Government per the relevant statutory provisions of the CGST Act. Once the amount of tax so collected is deposited with the Government and he has not retained any such amount, he has submitted that no recovery of such an amount can be made against him, In this regard. he has claimed that the Central Government and the concerned State Governments are the authorities that collect GST and the Consumer Welfare Funds constituted under the CGST Act / corresponding GST legislation of the concerned States are the beneficiaries of any amount of profiteering. Without prejudice to the submission that he has not contravened Section 171 of the CGST Act, any recovery of excess tax paid with respect to the amount of alleged profiteering liability should be recovered from the respective Governments which have collected the said excess tax and restituted to the recipients who are identifiable in the present case. Once the amount of tax so collected i....
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....tion in prices", Further. the CGST Act did not provide any time frame within which such commensurate reduction in prices was to be passed on and Rule 122 to 137 of the above Rues also did not provide any methodology for determining the meaning of the term "commensurate reduction" in prices and because of the absence of any prescribed methodology it was important to adopt a logical method and in case actual figures were available, then actual working has to be checked which could satisfy the intention of the legislature and rationally pass on the benefit to the customer on account of transition into GST regime. He has further claimed that he has not taken any credit of ITC. Excise Duty, or CENVAT Credit at the time of transition into GST Regime. Further, whatever ITC or CENVAT Credit which he was not taking earlier and which has been made available to him post GST, he has prepared the working and passed on the benefit therefore, he has complied with the requirement of Section 171 of the CGST Act, 2017. He has also stated that the DGAP in his report has completely ignored the genesis of Section 171 of the Act as the intention of the legislature was to determine the benefit of ITC whi....
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....ers as part of the price charged from them. This is not Visible to the customer as it forms a part of the cost of the flat. (c). this will change under GST. Under GST, full input credit would be available for offsetting the headline rate of 12%. As a result, the input taxes embedded in the fiat will not (& should not) form @ part of the cost of the fiat. (d). the builders were expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/ installments...." He has also submitted that based on the above press release, every developer was required to pass on the benefit of Excise Duty and VAT as he was able to avail ITC of the GST. The approach prescribed by the Central Board of Indirect Taxes & Customs (CBIC) had further substantiated the fundamentals laid down in Section 171 of the CGST Act, 2017 and he had followed a similar methodology to identify such costs and had already passed on the above benefit to his customers. (i). further, he has pleaded that it was an established principle of law that the intention of the legislature was deemed to be a cornerstone in the interpretation of the statutes. Citing the law s....
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....ered the ratio of benefit would be reduced to 2.85 % as opposed to 6.55%. (j). he has further submitted that as per Section 171 (1) of the CGST Act 2017: 'Any reduction in rate of tax on supply of goods or services or the benefit of Input Tax Credit Shall be passed on to the recipient by way of commensurate reduction price.' In the instant case, the effective rate ot tax on supply of construction services to the customers had increased under the GST regime. Further, regarding the benefit of ITC, he was not allowed to avail ITC of VAT paid on inward supplies consumed for construction of flats as well as Cenvat Credit of duties paid on input services used in providing construction services to the customers. Therefore, pursuant to the introduction of GST, to the extent of the rate of VAT paid and Cenvat Credit which was not available earlier and was made available on the implementation of GST and based on the working, he has passed on the benefit to the customers of Rs.1,88,56,365/-. As the project has been completed and OC has been obtained, complete details of ITC and Cenvat Credit under Pre GST and Post GST were available and he has provided the complete detailed working al....
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.....e.f. 01,04.2019 is mentioned in para 27 of the report dated 28.08.2020 ? 33. Accordingly the DGAP vide his supplementary Report dated 16.02.2021 and 18.04 2021 has submitted replying on the above issues as below:- (a). On the issue mentioned in para 32 (i) supra. the DGAP has stated that the total ITC available to the Respondent from July 2017 to January 2019 is Rs. 4,77,91.565/-, as mentioned in Table of para 13 (viii) of the DGAP's report dated 28.08.2020 is correct and the amount of total ITC for the period July 2017 to March 2019 is same as July 2017 to January 2019 because the Respondent has not availed ITC in Feb 2019 and March 2019. (b). On the issue mentioned in para 32(ii) supra, the DGAP has stated that the Respondent has reversed ITC in respect of 27 units in the month Of Jan. 2021. (c). On the contention of the Respondent made at para 31 (a) supra, the Respondent in the said para is baseless as this Authority has been constituted under Section 171 (2) of the CGST Act 2017. The Parliament, the State Legislatures, the Central and the State Governments, and the GST Council in their wisdom have not thought it fit to provide for a judicial member in this Authorit....
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....ncil. Therefore, this Authority may exercise such powers as have been prescribed under the CGST Rules, 2017. Since the functions and powers to be exercised by this Authority have been approved by competent legislatures, the same is legal and binding on the Petitioner. He has further stated that Article 19 (1) (g) of the Constitution guarantees all the citizens the right to freedom of trade and commerce and Section 171 of the Act or the Rules 126, 127, and 133 made thereunder nowhere infringe upon this Fundamental Right. Therefore. Section 171 of the CGST Act is not ultra vires of Article 19(1)(g) and 246A, as Article 246A gives power to the legislature to frame GST Law and Anti-profiteering provisions are part of GST Law. (e). On the contention of the Respondent made at para 31 (c) Supra, the DGAP has stated that the said contention of the Respondent in the said para is not correct Further. he has stated that the "Methodology and Procedure" has been notified by this Authority vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017. The main contours of the 'Procedure and Methodology for passing on the benefits of reduction in the rate of tax and the bene....
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....ase are different. In one real estate project, the date of start and completion of the project, price of the house / commercial unit. mode of payment of the price, stage of completion of the project, the timing of the purchase of inputs. rates of taxes, amount of ITC availed. total saleable area, area sold and the taxable turnover realized before and after the GST implementation would always be different from the other project and hence the amount of benefit of additional ITC to be passed on in respect of one project would not be similar to another project. Issuance of Occupancy Certificate/Completion Certificate would also affect the amount of benefit of ITC as no such benefit would be available once the above certificates are issued. Therefore, no set parameters can be fixed for determining the methodology to compute the benefit of additional ITC which would be required to be passed on to the buyers of such units. The case of CIT v. B.C. Srinivasa Setty (1981)2 SCC 460 and Commissioner, Central Excise and Customs, versus Larsen and Toubro Limited (2016) 1 SCC 170 is not applicable in this case as the "Methodology and procedure has been notified by this Authority vide its Notifica....
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....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 ITC to the recipient by way of commensurate reduction in the price of the goods or services or both. The DGAP has further stated that based on the above Explanation there is no doubt about the definition of profiteering which has been duly incorporated in the CGST Act, 2017, hence the above contention of the Respondent is incorrect and the interpretation given by the Respondent io wrong. Accordingly, the case of Islamic Academy of Education v, the State of Karnataka, (2003) 6 SCC 697, 774 does not support the cause of the Respondent (h). On the contention of the Respondent made at para 31 (f) supra. the DGAP has submitted that the Respondent has not only collected excess base prices from his customers which they were not required to pay due to benefit of ITC but the Respondent has also compelled his customers to pay additional GST on these excess base prices which customers were not required to pay. By doing so the Respondent has defeated the very objective of both the Central and the State Governments which aimed to provide t....
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....Out of these taxes. the input tax credit (ITC) of some taxes was not being allowed in the erstwhile tax regime, For example. the input tax credit of Central Sales Tax, which was being collected and appropriated by the States, was not admissible. Similarly. in the case of construction service, while the input tax credit of Service Tax was available, the input tax credit of Central Excise Duty paid on inputs was not available to the service provider. Such input taxes, the credit of which was not allowed in the erstwhile tax regime, used to get embedded in the cost of the goods or services supplied, resulting in increased prices. With the introduction of GST with effect from 01.07.2017. all these taxes got subsumed it' the GST and the input tax credit of GST is available in respect of all goods and services unless specifically denied. Broadly, the additional benefit of input tax credit in the GST regime would be limited to those input taxes. the credit of which was not allowed in the pre-GST regime but is allowed in the GST regime. This additional benefit of input tax credit in the GST regime is required to be passed on by the suppliers to the recipients by way of commensurate red....
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....ort. the DGAP was directed to reinvestigate the above complaint under Rule 133 (4) Of the above Rules vide Order No, 17/2019 dated 02.12.2019. 36. In the light of the abovesaid Order, the DGAP has re-investigated the matter and submitted his Report dated 28.08.2020. wherein it was reported that the ITC as a percentage of the total turnover which was available to the Respondent during the pre-GST period was 0.00% and during the post-GST period this ratio was 6.55%, as per the Table-A mentioned at para 15 supra and therefore, the Respondent has benefited from the additional ITC to the tune of 6.55% (6.55% - 0.00%) of the total turnover, which he was required to pass on to the flat buyers of this project. The DGAP has also found that the Respondent has not reduced the basic prices of his flats by 6 55% due to the additional benefit of ITC and by charging GST at the increased rate of on the pre-GST basic prices, he has contravened the provisions Of Section 171 of the CGST Act. 2017. Further, the DGAP has submitted that the benefit of Rs. 4,74,88, 840/- was to be passed on by the Respondent to home buyers for the period 01.07.2017 to 31 03.2019 but the Respondent has already passed on ....
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....pondent and have been duly verified from his Service Tax and GST Returns filed by the Respondent for the period April 2016 to June 2017 and July 2017 to March 2019 respectively and hence, the ratios calculated by the DGAP are based on the factual record submitted by the Respondent and hence they can be relied upon while computing the profiteered amount The above methodology has also been approved by this Authority in all the cases where the benefit of ITC is required to be passed on. Therefore. the above methodology is appropriate. logical. reasonable. and in consonance with the provisions of Section 171 of the CGST Act. 2017. 40. Further, Applicants No.1 and 2 have claimed that the Respondent has not availed any ITC between April 2019 to November 2019 as he had opted for the new scheme. They have submitted that the Respondent might be directed to claim the ITC for the said period and the same should be refunded to fiat buyers. In this regard. as per Notification No. 03/2019 CTR dated 29.03.2019 issued by the CBIC, clearly provides that the builders could choose the option of the new effective tax rate @ 1% without ITC or the old effective tax rate @ 8% with ITC on the affordable ....
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....ociation v. union of India, (2014) 10 SCC 1 and the Hon'ble Madras High Court's Order dated 20.09.2019 in the case of Revenue Bar Association V. Union of India in W.P Nos. 21147.21148 and 14919 of 2018, has contended that the composition of this Authority is unsustainable and unconstitutional, as there is no statutory provision for challenging the Order passed by this Authority in appellate or review proceedings, and also despite exercising judicial powers, this Authority has been statutorily constituted without a judicial member under Rule 122 of the Central Goods and Service Tax Rules, 2017. In this regard, it would be pertinent to mention that this Authority has been constituted under Section 171 (2) of the CGST Act. 2017 and anti-profiteering provisions have been made under Section 171 of the CGST Act. 2017 and Rules 122-137 of the CGST Rules, 2017 which are very clear in their intent The Parliament, the State Legislatures, the Central and the State Governments as well as the GST Council, which is a constitutional body, in their wisdom have not thought it appropriate to provide for an appellate mechanism against the orders passed by this Authority in the CGST Act, 2017,....
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....y and also Section 171 of the CGST Act does not authorize any rules to be framed by this Authority or DGAP. In this regard, the Parliament as well as all the State Legislature have left the task of framing the Rules under the CGST Act, 2017 to the Central Government as per the provisions of Section 164 of the CGST Act. Accordingly, the Central Government in terms of Section 171 (3) of the CGST Act, 2017 read with Section 2(87) of the Act. has prescribed the powers and functions of the Authority. on the recommendation of the GST Council, which is a Constitutional federal body created under the 101st Amendment of the Constitution, as per Rule 127 and 133 of the CGST Rules, 2017. Further. the power to determine its own Methodology & Procedure has been delegated to this Authority under Rule 126 of the above Rules under the provisions of Section 164 of the above Act. Such power is generally and widely available to all the judicial, quasi-judicial and statutory authorities to carry out their functions and duties. Since the functions and powers to be exercised by this Authority have been approved by competent bodies, the same is legal and binding on the Respondent. The Authority the exer....
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....19 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come into force w.e.f 01.01.2020, by inserting Section 171 (3A) of the CGST Act 2017. This Authority finds that, as no penalty provisions were in existence between the period from 01.07.2017 to 31.03.2019 When the Respondent had violated the provisions of Section 171 (1) the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. 47. The Respondent vide his submissions dated 07.10.2020, had claimed that he should be allowed VAT credit for the pre-GST period whereas as per DGAP's Report dated 28.08.2020, the Respondent categorically submitted that he had opted composition scheme of 1% VAT for his project and he also submitted that he had purchased raw material against Form-C and not availed any VAT input Credit. He further submitted that in terms of the Haryana VAT Policy, he had not Charged VAT from the homebuyers. Moreover, he had neither provided any VAT details nor VAT Returns to the DGAP during the investigation. Given the above, this contention of the Respondent is incorrect and not acceptable. 48. Further. the Respondent has....
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....Rs.2,80,46,934/- from 772 flat buyers other than the above Applicants. The details of the amount of benefit of ITC passed on. the benefit to be passed on and the details of the buyers have been mentioned by the DGAP in Table-B and Annexure-13 of his Report dated 28 08.2020. These buyers are identifiable as per the documents placed on record. Therefore, the Respondent is directed to pass on an amount of Rs.34,418/- each to Applicant No. 1, 2 & 3, Rs.36,120/- to the Applicant No. 4, Rs.27.510/- each to Applicant No. 5, 7, 8. 9, 10. 11. 12.15, Rs.36,120/to the Applicant No, 6, Rs.48,029/- to the Applicant No. 13. Rs.70.068/- to the Applicant No. 14, and Rs.71,868/- to the Applicant No. 16 and Rs.2,80,46,934/- to the other 772 home buyers respectively along with the interest @ per annum from the dates from which the above profiteered amount was collected by him from them till the payment is made as prescribed under Rule of the CGST Rules. 2017. The Authority directs the Respondent to comply with this Order within a period of three months from the date of receipt of this order failing which the said amount shall be recovered in terms of the CGST Act, 2017. The details of the amounts to....