TaxTMI 
TaxTMI 
2022 (9) TMI 1506
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....mittee on Anti-profiteering, in its meeting, the minutes of which were received in the DGAP's office on 15-10-2020, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. Accordingly, investigation was initiated to collect evidence necessary to determine whether the benefit of ITC had been passed on by the Respondent to his customers in respect of Construction Service supplied by the Respondent. (b) On receipt of the reference from the Standing Committee on Anti-profiteering, a Notice under rule 129 of the Rules was issued by the DGAP on 5-11-2020. calling upon the Respondent to reply as to whether he admit that the benefit of ITC had not been passed on to his customers by way of commensurate reduction in price and if so, to suo motu determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all supporting documents. Vide the said Notice, the Respondent was also given an opportunity to inspect the non-confidential evidences/information furnished by the Applicant No. 1 during the period 12-11-2020 to 13-11-2020. However, the Respondent did not avail this opportunity. (c) The....
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....= 2021 (376) E.L.T. 401 (S.C.) = [2021] 127 taxmann.com 72/167 SCL 99. (g) In response to the DGAP's Notice, dated 5-11-2020, the Respondent submitted partial documents/information vide letters and e-mails, dated 23-11-2020, 30-1-2021, 24-2-2021, 1-3-2021, 21-9-2021. 22-9-2021, 27-9-2021 and 29-9-2021. The submissions of the Respondent are given below:- i. The Respondent was incorporated under ''The Uttar Pradesh Urban Planning And Development Act, 1973 " by an Act of the Uttar Pradesh State legislature in order to ensure that there was orderly and planned development within Lucknow. It was imperative to point out that section 7 of the said Act clearly stipulates the Objectives of the Authority which has been reproduced hereunder for reference:- "The objects of the Authority shall be to promote and secure the development of the development area according to plan and for that purpose the Authority shall have the Power to acquire, hold, manage and dispose of land and other property, to carry out building, engineering, mining and other operations, to execute works in connection with the supply of water and electricity to dispose of sewage and to provide a....
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....pplicant No. 1 had squarely failed to state anywhere in his complaint that he was a beneficiary of the benefit of input credit which was moot point of his complaint. iv. It was pertinent to point out the law in this respect had been clearly laid down by the Hon'ble Supreme Court in the matter of S.P. Chengalvaraya Naidu v. Jagannath AIR 1994 SC 853, that the one approaching the courts/qausi-judicial authorities should come with clean hands. The relevant portion of the citation was cited hereunder- "One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court was being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation." v. The Hon'ble Supreme Court had in the matter of Suresh Kumar Goyal v. State of Uttar Pradesh [Criminal Appeal No. 56 of 2019, dated 11-1-2019], held that "co....
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....and the availment of transition benefit under section 140(3) & (6) would not arise. That even the question of profiteering in these cases would not arise which was also confirmed by the NAA vide his ruling Arjun Kumar Parwani v. Signature Builders Private Limited. x. While it was clear that the rigours of section 171 were not attracted in this case since the very first allotment based on a lottery was made after 1-7-2017. However to further buttress his contentions, the Respondent stated that this issue had been clearly addressed in the NAA case law of matter of Ramesh Kumar Yadav v. Vatika Ltd. [2019] 107 taxmann.com 50. xi. Even though the rigour of the Anti-profiteering law was not attracted, however since the Respondent was a Government Authority, it had passed on the entire credit to the consumers as had been demonstrated in the excel sheet of homebuyers. With regards to the issue of ITC benefit passed on it was pointed out that Rs. 467.80 lacs in respect of "Swati Apartments" and Rs. 242.01 lacs in respect of "Kritika Apartments" totalling Rs. 709.81 lacs had been passed on to the homebuyers on a proportionate basis. (h) Vide the aforementioned l....
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.... way of commensurate reduction in price, in terms of section 171 of the CGST Act, 2017. (l) From the verification of documents submitted by the Respondent and his submission, it appeared that there was no sale of the flats in the said project in the pre-GST regime. Further, the first allotment made by the Respondent in this project was 4-7-2017 i.e. in post-GST period. On scrutiny of the documents submitted by the Respondent it was observed that the Respondent had invited applications for the allotment of flat in his new housing scheme 2016 named as "LDA Swati Apartment". Besides, this scheme, the Respondent had also offering flats in "Kritika apartment" and both housing schemes was located at Sultanpur road, Lucknow. In the scheme, flats was available in Stilt+Ground+3 floor building and total five types of flats were available for registration including LIG-Type-I, LIG-Type-II, LIG-Type-III, LIG-Type-IV and LIG-Type-V, for registration in the scheme from 15-7-2016 to 16-8-2016 which was offered by the Respondent. The Respondent had finally announced the lottery draw on 15-6-2017 for the project "Kritika & Swati Apartment". From the above discussion, it was clear that the ....
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.... 6. Benefit of ITC to be passed by the Respondent F={(A+ B) *(E)/D} 7,47.31.900.84/- 7. Further Benefit to be passed by the Respondent G= 37,50,052.03/- (o) From the above table it was observed that the Respondent required to passed on the additional benefit of ITC of Rs. 37,50,052.03/- plus 12% GST in respect of the proportionate units sold by the Respondent up to 30-9-2020. Further, in respect of unsold units the Respondent was required to passed on the additional benefit of ITC accordingly. (p) On the basis of the details of outward supply of Construction Services submitted by the Respondent, it was also observed that the service was supplied in the State of Uttar Pradesh only. (q) From the above discussion, it appeared that the benefit of additional ITC accrued to the Respondent post-GST and the same was required to be passed on by the Respondent to his recipients. Section 171 of the CGST Act, 2017 had been contravened by the Respondent, inasmuch as the additional benefit of ITC of Rs. 37,50,052.03/- plus 12% GST by the Respondent during the period 1-7-2017 to 30-9-2020. It was concluded that the Respondent was required to ....
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....ht or might not have been incurred and there was no method by which the 5% could be anticipated at the time of costing to pass on the benefit of ITC. It was submitted that since the final costing of the project and this 5% variation had been incurred, the Respondent was in the process of passing on this benefit to the end-users. The Respondent submitted that this is not in the nature of profiteering but only in the nature of practicality that a benefit could only be passed on once the certainty of these expenses could be reliably assessed. 4. The Applicant No. 1 vide his email dated 8-4-2022 has submitted that the Respondent allotted the flat to him with value of Rs. 16 lacs as per the allotment letter and thereafter, the cost of the flat escalated to Rs. 23 lacs without taking any concurrence from him. 5. Copy of the above submissions dated 15-3-2022 & 7-4-2022 filed by the Respondent were supplied to the DGAP for supplementary Report under rule 133(2A) of the CGST Rules. 2017. The DGAP has filed his clarification dated 20-4-2022 & 28-6-2022 wherein he has inter alia submitted the following clarification:- (a) For the contention raised by the Respondent regarding the amount of....
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....the project "Kritika & Swati Apartment". From the above discussion it was clear that the base price of the flats was already fixed before the introduction of GST at the time of advertisement only and hence the benefit of additional ITC accrued to the Respondent in post-GST period could not have been factored in base prices determined prior to introduction of GST. Further, the finalization of names of allottee's were also done prior to introduction of GST. As the result of the lottery drawn for the project "Kritika & Swati Apartment" in on 15-6-2017, prior to the introduction of GST and on the prices set before the introduction of GST. It was therefore, evident that the benefit of ITC was not factored in deciding the prices. Accordingly, the profiteering in the said project had been calculated. 6. The Respondent had filed his rejoinders/submissions dated 30-5-2022 & 27-7-2022 vide which he had reiterated his earlier submissions and had inter alia stated:- a. The allotment letter appended by the complainant in his mail states that this price was "Estimated Cost" and the said cost was also cited as Rs. 16,60,000/- and not Rs. 16.00.000/-. It was pointed out that Rs. 16,60,000/-....
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....erefore the provisions of Anti-Profiteering did not apply. The Respondent had already submitted citations in this regard which had not been distinguished by either the Applicant No. 1 or the DGAP. The DGAP had averred that "rates were fixed in pre-GST period", this averment was untrue since only an estimated cost was fixed at the time of allotment and the actual cost was not determined at the time of such advertisement and therefore estimated cost by his very nomenclature means that this cost was not cast in stone. ii. The DGAP had clearly stated in his reply that Rs. 7.09.81.848.82/- had been passed on by the Respondent "suo motu" to the allottee. That this ITC which had been passed was because the Respondent felt that any benefit in the form of ITC should have been passed on to the end-customers but not because he was mandated by law to do so. That it was a practice that the Respondent follows till date in case of projects which were launched years after GST laws came into force as a measure of furthering the spirit behind the legislation and ensuring that the property was passed on to the allotees at actual cost. It was further pointed that with respect to the balance amount....
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....-2022, 30-5-2022 and 17-7-2022. The Applicant No. 1 has also reiterated his complaint and his submissions made vide his email dated 8-4-2022. 8. The Authority has carefully considered the Reports filed by the DGAP, all the submissions and the documents placed on record, and the contentions raised by the Respondent vide his written submissions. It is clear from the plain reading of section 171(1) that it deals with two situations: - one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post-GST period; hence the only issue to be examined is whether there was any net benefit of ITC with the introduction of GST. It is observed from the DGAP's report that there was no sale of flats in pre-GST regime. However, the Authority finds that Respondent had invited applications for the allotment of flats in his new housing scheme 2016 named as "LDA Swati Apartment". Besides, this scheme, the Respondent was also offering flats in "Kritika Apartment". In the sche....