AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 1248
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....s Curiae with Mr. Vikramaditya Bhaskar, Advocate. Mr. Abhishek A Rastogi, Ms. Pooja M. Rastogi, Ms. Meenal Songire and Mr. Ajay Singh. Advs. Mr. Aseem Mehrotra, Adv. Mr. Tarun Gulati, Sr. Advocate with Mr. Sparsh Bhargava with Ms. Ishita Farsaiya, Advocate. Mr. Naresh Thacker, Mr. Kumar Visalaksh, Mr. Udit Jain, Mr. Arihant Tater, Mr. Saurabh Dugar and Mr. Ajitesh Dayal Singh, Advocates. Mr. Ajay Bhargava, Ms. Vanita Bhargava and Mr. Nikitha Shenoy, Advs. Mr. Aseem Chaturvedi and Mr. Sahil Siddiqui, Advs. Mr. V. Lakshmikumaran, Mr. Karan Sachdev, Mr. Yogendra Aldak with Mr. Agrim Arora, Advocates Mr. Aseem Mehrotra, Adv. Mr. Rupender Sinhmar, Mr. Prahlad Singh, Mr. K. Gurumurthy, Advs., Mr. R. Jawahar Lal, Mr. Siddharth Bawa Mr. Anuj Garg, Mr. Mohit Sharma and Ms. Harshita, Advocates. Mr. Sumit K Batra and Mr. Manish Khurana, Advocates. Mr. Abhishek Choudhary, Advocate, Mr. Puneet Agrawal, Advocate with Mr. Prem Kandpal, Mr. Ketan Jain and Mr. Chetan Kumar Shukla Advocates., Mr. S. Ganesh, Senior Advocate with Mr. U.A. Rana and Mr. Himanshu Mehta, Advocates, Mr. Prateek Bansal, Advocate. Mr. Shashank Shekhar with Mr. Siddharth Rajkonwar, Advs. Mr. Kamal Sawhney, Mr. Deepak Thackur ....
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....or NAA and DGAP. Mr. Asheesh Jain, CGSC with Mr. Gaurav Kumar Advocate for R-1 Mr. Farman Ali, Advocate with Ms. Usha and Mr. Krishan Kumar, Advocates for R-2 & 3 Mr. Kartik Sabharwal and Ms. Manisha Dubey, Advocates for NAA and DGAP. Mr. Aditya Singla, SSC with Ms. Charu Sharma, Advocate for R-4. Ms. Pratima N. Lakra, CGSC with Ms. Vanya Bajaj and Mr. Kashish G. Baweja, Advocates for UOI. Mr. Vinod Diwakar, CGSC with Mr. Olson Nair, Advocate for UOI. Mr. Farman Ali, SPC with Mr. Athar Raza Farooqui, Advocate for UOI. Mr. Anurag Ahluwalia, CGSC with Mr. Milind Nagpal Advocate for UOI. Mr. Kavish Garach, Ms. Sejal Aneja Ms. Aakanksha Kaul, Advocate with Ms. Versha Singh and Mr. Aman Sahani & Ms. Rhea, Advocates for UOI. Mr. Vikrant N. Goyal, Advocate with Mr. Nitin Chandra and Mr. Jeet Chakravarti, Advocates for UOI. Mr. Harish Vaidyanathan Shankar, CGSC with Mr. Srish Kumar Mishra, Mr. Sagar Mehlawat and Mr. Alexander Mathai Paikaday, Advocates. Mr. Kamal Sawhney, Mr. Deepak Thackur, Ms. Aakansha Wadhwani, Advocates for R-4. Mr. Ravi Prakash, CGSC with Ms. Astu Khandelwal, Advocates for UOI. Mr. Gyanendra Singh, Advocate. Mr. Bhagvan Swarup Shukla, CGSC with Mr. R.R. Mishra, Advoca....
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.... Mr. Debar Chan De, Advocates for UOI. Mr. Sachin Singh and Ms. Chaahat Khanna, Advs. Mr. Rohan Shah, Mr. S. Mahesh Sahasranaman and Mr. S. Rajan, Advocates for UOI Ms. Amrita Prakash, CGSC with Mr. Vishal Ashwani Mehta, Advocate for UOI Mr. Rishabh Sahu with Mr. Sameer Sharma Advs. for UOI. Mr. Satya Ranjan Swain, Sr. PC, Mr. Kautilya Birat, Adv. for R-1/UOI Mr. Anshuman, Sr.Panel Counsel with Mr. Piyush Ahluwalia, Advocate for R-1. Mr. Aditya Dewan, Advs. for R-3/NAPA. Ms. Talish Ray, Adv. Mr. Rony John, Mr. Piyush Swami, Mr. Arshdeep Singh and Mr. Anuj Dubey, Advocates for R-2 and 3. Mr. Parangat Pandey and Ms. Alpana Singh, Advocates for R-3. Mr. Yunus Malik, Adv. NAA and DGAP. Ms. Archana Surve, Advcoate for R-1 to 4 Mr. Ravi Prakash, CGSC with Mr. Archana Surve, Mr. Vinod Kumar Ahlawat, Advocates for UOI. Mr. Kamal Kant Jha, SPC with Mr. Avinash Singh, Advocate for R-1/UOI. Mr. Abhishek Saket, Advocate for UOI. Mr. K.K. Jha, SPC for R-1. Mr. Varun Sharma, Advocate for the complainant. Ms. Sharmila Upadhyay, Ms. Supriya R. Pandey and Mr. Pawan Upadhyay, Advs. for R-4. Ms. Uma Prasuna Bachu, Sr.PC with Ms. Poonam, GP for R-1. Mr. Sandeep Vishnu, Advocate for UOI. Ms. Suruchi Su....
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..../2021, W.P.(C) 997/2021 & CM No. 2721/2021, W.P.(C) 1357/2021, W.P.(C) 1366/2021, W.P.(C) 1593/2021 & CM APPL. No. 4529/2021, W.P.(C) 1765/2021, W.P.(C) 1766/2021, W.P.(C) 1852/2021 & CM Nos. 5359/2021, 29026-29027/2021, W.P.(C) 1951/2021 & CM APPL. Nos. 5705-06/2021, W.P.(C) 2440/2021, W.P.(C) 2676/2021 & CM APPL. 7906-07/2021, W.P.(C) 2785/2021 & CM APPL. 8368/2021, W.P.(C) 2897/2021, W.P.(C) 2970/2021, W.P.(C) 3254/2021, W.P.(C) 3306/2021, W.P.(C) 3327/2021, W.P.(C) 3508/2021 & CM APPL. Nos. 25152-53/2021, W.P.(C) 3867/2021, W.P.(C) 4600/2021, W.P.(C) 4789/2021, W.P.(C) 4794/2021 & CM APPL. 14802/2021, W.P.(C) 6337/2021 & CM APPL. 19960/2021, W.P.(C) 12471/2021 & CM APPL. No. 39234/2021, W.P.(C) 14666/2021 & CM APPL. 46201-46203/2021, W.P.(C) 6983/2022 & CM APPL. 21405/2022, W.P.(C) 7781/2022 & CM APPL. 23831/2022, W.P.(C) 8705/2022 & CM APPLs. 26239-26240/2022, W.P.(C) 12533/2022 & CM APPL. Nos. 37949-37950/2022, W.P.(C) 12557/2022 & CM APPL. Nos. 38027-38028/2022, W.P.(C) 12573/2022 & CM APPLs. 38062-38063/2022, W.P.(C) 12639/2022 & CM APPLs. 38309-38310/2022 & 39263/2022, W.P.(C) 12797/2022 & CM APPLs. 38922-38924/2022, W.P.(C) 13657/2022 & CM APPLs. 41646-41647/2022, W.P.(C)....
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....s. Tata Starbucks Private Limited, Raymond Consumer Care Ltd., M/s. LE Reve, Neeva Foods Pvt. Ltd., M/s Subway Systems India Pvt. Ltd., M/s. Sub West Restaurants LLP, Bonne Sante, Horizon Projects Private Limited, ITC Limited & Anr., M/s Dra Aadithya Projects Pvt. Ltd., Gillette India Ltd., Procter And Gamble Home Products Pvt Ltd., M/s Alton Buildtech India Pvt. Ltd. M/s. Electronics Mart India Ltd., Inox Leisure Limited, M/s. Manas Vihar Sahakari Awas Samiti Ltd. Yellow Sun Restaurants Private Limited, M/s. Puri Construction Pvt. Ltd., Southwinds Projects LLP, Anand Rathi, WTC Noida Development Company Private Limited, M/s Tata Play Limited, Lichfl Care Homes Limited. L Oreal India Private Limited, M/s. Swati Realty, M/s. Perfect Buildwell Pvt Ltd., Vasavi And GP Infra LLP, M/s. DLF Limited, NY Cinemas LLP, M/s. Airmid Real Estate Ltd., Gelenmark Pharmaceutical Limited And Anr. Barbeque Nation Hospitality Ltd., Prescon Realtors And Infrastructures Private Limited Bhagwati Infra, Allergan Healthcare India Pvt. Ltd., Anutone Acoustics Limited, Arihant Superstructures Ltd., Prasu Infrabuild Pvt. Ltd., M/s. Nandi Infratech Pvt. Ltd., New World Realty LLP, Wadhwa Realty Pvt Ltd. M/s. ....
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....r input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. (3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed. [(3A) Where the Authority referred to 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 purposes 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.] Rule 122 ....
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.... be selected as a Technical Member if he has attained the age of sixty-two years. [Provided further that the Central Government with the approval of the Chairperson of the Council may terminate the appointment of the Technical Member at any time.] Rule 126 126. Power to determine the methodology and procedure The Authority may determine the methodology and procedure for determination as to whether the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices. Rule 127 127. Duties of the Authority. It shall be the duty of the Authority,- (i) to determine whether any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit has been passed on to the recipient by way of commensurate reduction in prices; (ii) to identify the registered person who has not passed on the benefit of reduction in the rate of tax on supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in....
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....nce presented to it by one interested party to the other interested parties, participating in the proceedings. (6) The Director General of [Anti-profiteering] shall complete the investigation within a period of [six] months of the receipt of the reference from the Standing Committee or within such extended period not exceeding a further period of three months for reasons to be recorded in writing [as may be allowed by the Authority] and, upon completion of the investigation, furnish to the Authority, a report of its findings along with the relevant records. Rule 133 133. Order of the Authority. (1) The Authority shall, within a period of [six] months from the date of the receipt of the report from the Director General of [Anti-profiteering] determine whether a registered person has 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. (2) An opportunity of hearing shall be granted to the interested parties by the Authority where any request is received in writing from such interested parties. [(2....
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....ctor General of Anti-profiteering referred to in sub-rule (6) of rule 129, the Authority has reasons to believe that there has been contravention of the provisions of section 171 in respect of goods or services or both other than those covered in the said report, it may, for reasons to be recorded in writing, within the time limit specified in sub-rule (1), direct the Director General of Anti-profiteering to cause investigation or inquiry with regard to such other goods or services or both, in accordance 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.]" Rule 134 134. Decision to be taken by the majority.- (1) A minimum of three members of the Authority shall constitute quorum at its meetings. (2) If the Members of the Authority differ in their opinion on any point, the point shall be decided according to the opinion of the majority of the members present and voting, and in the event of equality of votes, the Chairman shall have the second or casting....
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....efore, the same should have been stipulated by the Legislature. They submitted that it is settled law that the legislative authority cannot be delegated under a statute without appropriate guidelines or safeguards. In support of their submissions, they relied on the judgment of the Supreme Court in Ramesh Birch vs. Union of India, 1989 Supp SCC 430. 8. They submitted that it is settled law that delegatus non potest delegare which essentially means that a delegatee cannot further delegate unless expressly or impliedly authorized. They contended that the Legislature vide Section 171 of the Act, 2017 delegated the authority to determine/prescribe powers and functions of NAA to the Executive i.e. the Government of India. They submitted that the Government of India by way of Rule 126 of the Rules, 2017, contrary to the legislative mandate contained in Section 171 of the Act, 2017, further delegated the power to NAA to determine the methodology and procedure for determining whether the reduction in taxes or the benefit of Input Tax Credit had been passed on to the recipients. They stated that even NAA did not issue any guidelines as to how to determine profiteering. In support of thei....
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....e home the point that the methodology adopted by the respondents was flawed, the learned counsel for the petitioners gave an illustration of the contrasting results one would get after calculating the amount profiteered/required to be passed on in case of two identical real estate projects being developed by Developers A & B with the only difference being the advance payment received by them prior to the Goods and Services Tax Regime. They stated that assuming that two Developers (A & B) commenced construction of the two identical projects (having hundred flats of rupees one crore each) in 2017 and the projects were executed at an identical pace with identical inputs and with Developer A receiving sixty per cent of the amount (total sale price of the project) as advance during the pre-Goods and Services Tax period, Developer B receiving only twenty per cent as advance during that period, with all other factors being identical (like the credit availed/available during the pre-Goods and Services Tax period), the credit to turnover ratio for the two projects would vary drastically depending on the time when the payments from the customers were received. According to the petitioners, i....
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.... 1.18% 1,47,047 4,88,500 10. Sanjeev Aggarwal CM819B 9419 Sq.Ft. 1.18% 10,01,928 6,25,139 11. Mohan Agarwal CM804B 9419 Sq.Ft. 1.18% 20,66,050 6,25,139 12. Deep Kalra CM818B 9419 Sq.Ft. 1.18% 33,72,998 6,25,139 13. Action Construction Equipment Ltd. CM602A 9419 Sq.Ft. 1.18% 34,356 6,25,139 14. They also submitted that determination of profiteering can be made at different levels such as entity level, Stock Keeping Unit (hereinafter referred to as 'SKU') level, product level, customer level etc. Hence, an assessee intending to comply with the law has no way of ensuring whether its methodology is in compliance with Section 171(1) of the Act, 2017 or not. 15. Learned counsel for the petitioners also submitted that the operation of Section 171 of the Act, 2017 amounted to price-fixing and is therefore violative of Articles 19(1)(g) and 300A of the Constitution. They submitted that according to NAA's interpretation of Section 171 of the Act, 2017, once any of the events contemplated in Section 171 of the Act, 2017 occurs, i.e. either there is reduction in tax rate or benefit of Input Tax Cr....
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....eraging the impact of taxes and costs across goods or services under specific circumstances. 18. While referring to the Goods and Services Tax system introduced in Malaysia, they stated that the Anti- Profiteering measures had been incorporated under the Price Control and Anti-Profiteering Act, 2011 to control prices of goods, charges of services and to prohibit unreasonably high profiteering by suppliers. They stated that making unreasonably high profit was an offence under Section 14 of the said Act. They further stated that Section 15 of the said Act provided that the Minister shall prescribe the mechanism to determine whether the profit is unreasonably high considering different conditions and taking into consideration factors such as: tax imposition, suppliers' cost, supply and demand conditions and other relevant matters in relation or price of goods and services etc. It was pointed out that detailed guidelines were laid down under the Regulations issued in 2014 and 2016. 19. Learned counsel for the petitioners further submitted that Section 171 of the Act, 2017 is manifestly arbitrary and unreasonable, as it does not fix a period of time during which the reduced prices....
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....ted that the absence of a provision to appeal means that there is no judicial oversight over the decisions of NAA and indicates that there is a presumption that the findings of NAA are infallible. They submitted that Tribunals and Authorities which exercise functions similar to NAA have a robust appellate mechanism. They submitted that lack of a provision to appeal against the findings of NAA makes the Act, 2017 unconstitutional. 24. They submitted that Rule 124 of Rules, 2017 to the extent it deals with appointment and terms and conditions of service of the Chairman and Members of NAA is not in consonance with Article 50 of the Constitution of India as there is scope for governmental interference in the functioning of NAA. 25. Learned counsel for the petitioners submitted that NAA essentially determines the rights of those complainants who filed complaints and determines liabilities of the tax assessees against whom such an application/complaint is made / received. Therefore, according to them, since the exercise of power by NAA is a quasi-judicial function, the absence of a judicial member in the constitution of NAA renders Section 171 of the Act, 2017 and Rule 122 of the R....
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....uct against which complaint has been received by the authorities. They submitted that till 28th June, 2019 (when Rule 133(5) was enacted), NAA had no powers to direct investigation in respect of any product, other than the product complained of. However, with effect from 28th June, 2019, Rule 133(5) was introduced, whereby for the first time, NAA was statutorily empowered in the course of the proceedings before it, to direct the DGAP, to conduct an investigation in relation to products, other than the product complained of. They submitted that as a result of the amendment, the power to expand the scope of the investigation vests only with NAA and not with DGAP. They pointed out that in many cases, DGAP had on its own expanded the scope of the investigation to other products, which according to them, is without jurisdiction and ultra vires the provisions of the Act, 2017 and Rules, 2017. 29. Learned counsel for the petitioners submitted that the levy of penalty and interest cannot be ordered in the absence of corresponding specific substantive provisions under the Act, 2017. They submitted that the consequences of the breach of Section 171 of Act, 2017 should have been provided f....
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....d Services Tax indirect taxes). He submitted that Sections 2(62) and 2(63) of the Act, 2017 make it clear that the benefit of Input Tax Credits referred to in Section 171(1) are the Input Tax Credit granted under the Act, 2017 and not the Input Tax Credits granted under the Central Excise Act, the Service- Tax statute or the Sales-tax Acts. He further submitted that Section 9 of the Act, 2017 which provides for the levy of 'a tax called the central goods and services tax on all intra-State supplies of goods or services or both...' uses the same language as Section 171 and therefore Section 171 refers only to a reduction in the rate of tax levied / referred to under Section 9 of the Act, 2017. 33. Learned senior counsel for the petitioners in W.P.(C) 2897/2021, submitted that in a contract made after the reduction in the tax rate has come into effect, the parties are free to agree on any price. In support of his submission, he relied on Section 64-A of the Sale of Goods Act, which reads as under:- "64A. In contracts of sale, amount of increased or decreased taxes to be added or deducted.- (1) Unless a different intention appears from the terms of the contract, i....
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.... He submitted that if the said Rule (which was notified on 28th June, 2017) was indeed the fountainhead of constitution of NAA, the same would go against the very understanding of the respondents as recorded in the 35th and 45th Goods and Services Tax Council Minutes of Meeting as well as the Memo dated 09th September, 2019 of the Department of Revenue, Ministry of Finance, wherein it has been specifically observed that NAA had been constituted vide an office order dated 28th November, 2017. ARGUMENTS ON BEHALF OF THE RESPONDENTS 35. Mr. Zoheb Hossain, learned counsel appearing on behalf of the Respondent-authorities, prefaced his submissions by stating that Parliament introduced the Act, 2017 in order to simplify and harmonise the indirect taxes regime in the country by eliminating the multiplicity of taxes that were levied on the same supply system as a result of which there was a cascading effect. 36. According to him, the "anti-profiteering" measures were introduced in the Goods and Services Tax regime in order to provide for a mechanism to ensure that the full benefits of input tax credits and reduced Goods and Services Tax rates flow to the consumers who bear the bur....
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....the community are so distributed as best to sub serve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;" (emphasis supplied) 39. He submitted that the scope of judicial review in a fiscal statute is fairly limited as laid down by the Supreme Court in multiple judgments such as State of M.P. v. Rakesh Kohli, (2012) 6 SCC 312 and R. K. Garg v. Union of India, 1981 (4) SCC 675. 40. He further submitted that Article 246A of the Constitution of India empowers the Legislature to make laws 'with respect to' Goods and Services Tax. Article 246A of the Constitution reads as under:- "246A. Special provision with respect to goods and services tax.- (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the cours....
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....ces'. 44. He emphatically denied that the word 'commensurate' as used in Section 171 of the Act, 2017 has no clear and definite meaning. He referred to the Cambridge Dictionary where the word 'commensurate' is defined as 'in a correct and suitable amount compared to something else; suitable in amount or quality compared to something else; matching in degree'. Thus, according to him, Section 171 lays down a clear legislative policy and hence, no essential legislative function has been delegated. He submitted that the Courts have consistently held that after laying down the broad legislative policy, the minutiae can always be left to be decided by way of a subordinate legislation (See: Lohia Machines Ltd. vs. Union of India, (1985) 2 SCC 197, Pt. Banarsi Das Bhanot vs. State of Madhya Pradesh, AIR 1958 SC 909, Sita Ram Bishambher Dayal vs. State of U.P. (1972) 4 SCC 485). He further stated that it is well settled that the question whether any particular legislation suffers from excessive delegation, has to be determined by the Court having regard to the subject matter, the scheme, the provisions of the statute including its preamble and the background on which the statute is enact....
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....f the petitioners' contention that no methodology for calculating the profiteered amount had been prescribed is accepted, then also the said Section will not be rendered unconstitutional because as per Rule 126 of the Rules, 2017, NAA has been empowered to determine the said methodology. He pointed out that the Rule does not stipulate that NAA must necessarily determine the methodology and procedure to compute profiteering as it merely stipulates that the authority 'may' determine the methodology and procedure for such computation. He stated that substantive provision of Section 171 of the Act, 2017 provides sufficient guidance to the NAA to determine the methodology on a case to case basis depending on the peculiar facts of each case and the nature of the industry and its peculiarities. 48. Additionally he stated that no uniform calculation method can be prescribed because the computation of commensurate reduction in prices is purely a mathematical exercise and would vary from SKU to SKU or unit to unit or service to service and hence for determining the quantum of benefit as the extent of profiteering has to be arrived at on a case to case basis, by adopting suitable method ba....
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....ion base price of the product which is required to be maintained during the post rate reduction period on which the reduced rate of tax is required to be charged which would result in reduction in the price. According to him, the new MRP is required to be declared by affixing additional sticker or stamping or online printing in terms of letter No. WM/10(31)/2017 dated 16th November, 2017 issued by the Ministry of Consumer Affairs, Food and Public Distribution, Government of India. 52. While dealing with the argument of the Petitioners that it is legally impossible to pass on the benefits of the reduction of rate of tax in cases of low priced products in the FMCG industry, Mr.Zoheb Hossain, learned counsel, submitted that the Rules 2(m) and 6(1)(e) of Legal Metrology (Packaged Commodities) Rules, 2011 (as amended from time to time) provide guidance to the suppliers on how the MRP of the products is to be rounded off. The relevant portion of the aforesaid Rules are reproduced as hereinunder:- "Legal Metrology (Packaged Commodities) Rules, 2011 dated 7th March, 2011 as enacted with effect from 1st April, 2011: "2. Definitions:- ..... (m) "retail ....
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.... rate or Input Tax Credit by way of a commensurate reduction in prices of the goods or services, by increasing the base price of such goods or services, he would be depriving the recipients of the benefits of the reduction of tax rates or Input Tax Credits. Hence, he stated that if the supplier when increasing the base prices of the goods or services does not account for the (commensurate) reduction of prices as a result of the reduction of the tax rates or benefit of the Input Tax Credits, the supplier would be said to be profiteering under Section 171 of the Act, 2017. He, however, stated that NAA as well as this Court ought to be cautious of attempts of entities to justify suspicious increase in base prices contemporaneous with the reduction in tax rates or accruing of benefits of Input Tax Credits, under the garb of other commercial factors. According to him, the Courts and implementing authorities must be vigilant about devices designed for avoidance and must seek to adopt interpretations of the provisions that are least prone to resulting in avoidance. He referred to the judgment in McDowell & Co. Ltd. v. CTO, (1985) 3 SCC 230 where it has been held that "the proper way to co....
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....that the impugned provision applies irrespective of the price of the goods or services. He stated that it cannot be said that a law which forbids recovery of Goods and Services Tax at a rate higher than that applicable on the goods and services and which forbids suppliers from recovering Input Taxes from the recipients where credits are obtained on such Input Taxes, amounts to price- control or price-fixing. 57. He further submitted that even if Section 171 of the Act, 2017 is presumed to be a price-fixing legislation, it would not render the Section violative of Article 19(1)(g) of the Constitution of India. He submitted that the Supreme Court in several cases such as Diwan General and Sugar Mills Pvt. Ltd. & Ors. vs. Union of India, AIR (1959) SC 626; Union of India vs. Cynamide India Ltd., (1987) 2 SCC 720 where price fixing orders had been challenged, had upheld such orders by examining whether the orders take into account relevant factors/considerations. 58. He submitted that there is no legal principle on the basis of which the petitioners can contend that the mere absence of a time period, up to which reduced prices are required to be maintained, would render the provi....
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....ority at every level must have a judicial member. According to him, such a requirement would not only be wholly impractical but also be legally suspect. He stated that the judgments which have been relied upon by the petitioners follow a uniform principle that whenever a judicial tribunal is intended to replace or supplant the High Court with respect to judicial power which was hitherto vested in or exercised by Courts, such Tribunals must be manned by judicial members in addition to technical members who have specialized knowledge or expertise in a given field. In support of his submissions, he relied on the judgments of the Supreme Court in Union of India vs. R. Gandhi, (2010) 11 SCC 1, Rojer Mathews vs. South Indian Bank, (2019) SCC OnLine SC 1456. He stated: (a) the NAA did not replace or substitute any function which Courts were exercising hitherto; (b) it performs quasi-judicial functions but cannot be equated with a judicial tribunal; (c) it performs its functions in a fair and reasonable manner in accordance with the Act but does not have the trappings of a Court and (d) absence of a judicial member does not render the constitution of the....
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....ded/extended time-period for passing of an order would apply to all pending and future proceedings before NAA. He submitted that the time-frames provided in the anti- profiteering provisions are merely directory in nature and not mandatory. 67. Mr. Zoheb Hossain, learned counsel, stated that Section 171 of the Act, 2017 is widely worded and does not limit the scope of examination to only the goods and services in respect of which a complaint is received by the authorities. He submitted that Rule 129 of the Rules, 2017, which provides for the scope of powers of the DGAP, uses the words 'any supply of goods or services' and so the scope of powers of DGAP is very wide. 68. He stated that the contention of the petitioners that there was no mechanism for recovery of the alleged profiteered amount under Section 171 of the Act, 2017 overlooks Rule 133(3)(b) of the Rules, 2017 prescribed under Section 171(3) of the Act, 2017 which empowers NAA to order a supplier to 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 [18%] from the date of collection of the higher amo....
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....ed to pay the additional Goods and Services Tax. 72. Mr. Zoheb Hossain submitted that without prejudice to the fact that each and every Act of NAA is well reasoned and justified and can be defended to the satisfaction of this Court as and when the same are taken up case-wise, the case- specific submissions of the petitioners have no bearing whatsoever while considering the constitutional vires of Section 171 of the Act, 2017 and Rules contained in Chapter XV of the Rules, 2017. ARGUMENTS ON BEHALF OF THE LEARNED AMICUS CURIAE 73. Mr. Amar Dave, learned Amicus Curiae stated that the cardinal objective with which the Goods and Services Tax had been introduced was inter alia to ensure an efficient and robust indirect taxing system. 74. He contended that a perusal of the reports and the discussions preceding the introduction of Goods and Services Tax regime clearly indicated that the impact on prices of various goods and services had been factored in as a necessary consequence of the shift over to the Goods and Services Tax regime. 75. He pointed out that the report of the Comptroller and Auditor General of India ('CAG') of June, 2010 dealt with the manner in which the V....
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....ices of goods consumed by them. It was specifically observed that the proposed switchover to the flawless Goods and Services Tax system should therefore be viewed as a pro-poor system and not regressive. The report further specifically went into the implications of the proposed switchover to Goods and Services Tax on various products and sectors including prices of the goods. 77. He further stated that the Report of the Select Committee (presented to the Rajya Sabha on 22nd July, 2015) dealt with the issues of transition to Goods and Services Tax and the same dealt with inter alia issues of consumer benefit that would arise on account of the transition and related aspects. 78. Learned Amicus Curiae contended that the discussions at the time of the introduction of the Goods and Services Tax Bill in the Lok Sabha and the Rajya Sabha with regard to Section 171 of the Act, 2017 left no room for doubt that the said measure was introduced as a consumer benefit measure in order to ensure that the past experiences of the stakeholders retaining the benefit of tax reductions due to lack of legal mechanism is not repeated at the time of the switchover to Goods and Services Tax regime. ....
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....o get the direct benefit. According to him, such an indirect method to pass the benefit is not contemplated under the express provisions and is also not in sync with the right of the recipient to get the actual benefit of the change in the tax rate. He stated that no such indirect method to pass on the benefit can be read-into the provision when the same is consciously not provided for therein thereby establishing/cementing the right of the recipient/consumer to get the benefit by way of commensurate reduction of the price itself. 83. Learned Amicus Curiae submitted that under the scheme of the Act, 2017, it is contemplated that the Central Government on the recommendations of the Goods and Services Tax Council (a constitutional body formed under the provisions of Article 279A of the Constitution of India) may constitute an Authority or empower an existing Authority constituted under any law for the purpose of examining whether benefit has actually been passed on to the recipients as contemplated under Section 171 of the Act, 2017. He pointed out that Chapter XV of the Rules deals with the subject of anti-profiteering and inter- alia provides the different layers of fact-finding....
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.... out; the objective sought to be achieved by the said exercise; the incorporation of all critical elements which are to guide any such exercise in the section itself; the nature of the authority contemplated and tasked to carry out the functions; the period monitoring of the same by the Goods and Services Tax Council etc. are to be considered when dealing with the subject matter. COURT'S REASONING PRINCIPLES FOR ADJUDICATING THE CONSTITUTIONALITY OF AN ENACTMENT 86. This Court is of the view that the principles for adjudicating the constitutionality of an enactment are well settled. Though they have been succinctly set out in a number of judgments, yet this Court considers it appropriate to reiterate them. 87. A Statute can be declared as unconstitutional only if the Petitioners make out a case that the Legislature did not have the legislative competence to pass such a Statute or that the provisions of the Statute violate the Fundamental Rights guaranteed under Part-III of the Constitution of India or that the Legislature concerned has abdicated its essential legislative function or that the impugned provision is arbitrary, unreasonable or vague in any manner. D.D. Basu....
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....some play in the joints because it has to deal with complex problems. The Supreme Court in its recent judgment in Union of India vs. VKC Footsteps India (P) Ltd., 2021 SCC OnLine SC 706 has reiterated the approach that the Courts have to adopt while dealing with tax or economic regulations. The relevant portion of the said judgment is reproduced hereinbelow:- "135. While we are alive to the anomalies of the formula, an anomaly per se cannot result in the invalidation of a fiscal rule which has been framed in exercise of the power of delegated legislation. In R.K. Garg [R.K. Garg v. Union of India, (1981) 4 SCC 675 : 1982 SCC (Tax) 30], P.N. Bhagwati, J. (as the learned Chief Justice then was) speaking for the Constitution Bench underscored the importance of the rationale for viewing laws relating to economic activities with greater latitude than laws touching civil rights. The Court held : (SCC pp. 690- 91, para 8) "8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. It has been said by no less a person than Holmes, J., that....
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..... Central Roig Refining Co. [Secy. of Agriculture v. Central Roig Refining Co., 1950 SCC OnLine US SC 14 : 94 L Ed 381 : 338 US 604 (1950)] be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in de....
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....ax called the goods and services tax which will be levied on supply of goods or services or both at each stage of supply chain starting from manufacture or import and till the last retail level. So, any tax that is presently being levied by the Central Government or the State Governments on the supply of goods or services is going to be converged in goods and services tax which is proposed to be a dual levy where the Central Government will levy and collect tax in the form of central goods and services tax and the State Government will levy and collect tax in the form of state goods and services tax on intra-State supply of goods or services or both. 4. In view of the above, it has become necessary to have a Central legislation, namely the Central Goods and Services Tax Bill, 2017. The proposed legislation will confer power upon the Central Government for levying goods and services tax on the supply of goods or services or both which takes place within a State. The proposed legislation will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of production and inflation in the economy, thereby making the Indian trade and industry mor....
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.... 6. The Notes on clauses explain in detail the various provisions contained in the Central Goods and Services Tax Bill, 2017. 7. The Bill seeks to achieve the above objectives." 92. From the aforesaid, it is apparent that the Act, 2017 levies a single tax on the supply of goods or services on the value addition at each stage of the supply chain from purchase of raw materials, manufacture of product or import, till the finished good reaches the hands of the consumer. This is best illustrated by the following example:- Stages Actions Price+Tax=cost Cost / Addition Total Tax @ 10% only on addition Total price 1st Purchase of raw material by manufacturer - 2000 2000 200 2200 2nd Sold finished goods to wholesaler (raw material to finished goods) 2000+200=2200 500 2700 50 2750 3rd Purchase of finished goods by Trader 2700+50=2750 400 3150 40 3190 4th Purchase of finished goods by actual consumer 3150+40=3190 300 3490 30 3520 Total 3200 320 3520 93. The Goods and Service Tax is a destination-based tax and is levied at the point....
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....prices to the recipient. Section 171 deals with amounts that the Central and State Governments have foregone from the public exchequer in favour of the consumers. This Court is of the view that the amounts foregone from the public exchequer in favour of the consumers cannot be appropriated by the manufacturers, traders, distributors etc. To allow them to do so would amount to unjust enrichment. Consequently, when the Goods and Services Tax rate gets reduced or the benefit of input tax credit, becomes available as a necessary consequence the final price paid by the recipient obviously requires to be reduced. In the absence of such anti-profiteering provisions, there would be no legal obligation to pass on the benefit of the Goods and Services Tax regime and, consequently, the intended objective of reducing overall tax rates and mitigating the cascading effect would not be achieved. 98. The expression 'profiteered' has been defined in the Explanation to Section 171 of the Act, 2017 to 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 comm....
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....turers / suppliers to pass on benefits of Input Tax Credits and/or reduction in rate of tax by way of commensurate reduction in prices to the recipients. The said Section further enables the establishment of an Authority to determine whether Suppliers have passed on the benefits of Input Tax Credits and reduction of the tax rates, and to exercise such other powers and functions as may be prescribed. 101. This Court is in agreement with the submission of the Respondents that the objective behind Section 171 is directly relatable to the Directive Principles of State Policy contained in Article 38(1) of the Constitution which requires the State to strive to secure a social order in which justice, social, economic and political shall inform all institutions of the national life and Articles 39(b) and (c) of the Constitution which require the State to direct its policy towards ensuring that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. 102. To summarise, Section 1....
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....C 358, the Supreme Court has held as under:- "28. The fountain source of legislative power exercised by Parliament or the State Legislatures is not Schedule 7; the fountain source is Article 246 and other provisions of the Constitution. The function of the three lists in the Seventh Schedule is merely to demarcate legislative fields between Parliament and States and not to confer any legislative power. The several entries mentioned in the three lists are fields of legislation. The Constitution-makers purposely used general and comprehensive words having a wide import without trying to particularize. Such construction should be placed on the entries in the lists as makes them effective; any construction which will result in any of the entries being rendered futile or otiose must be avoided. That interpretation has invariably been countenanced by the constitutional jurists, which gives the words used in every entry the widest- possible amplitude. Each general word employed in the entries has been held to carry an extended meaning so as to comprehend all ancillary and subsidiary matters within the meaning of the entry so long as it can be fairly accommodated subject to an ove....
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.... due from him, apart from other punitive impositions to deter and to sober the merchants whose arts of dealing with customers may include "many a little makes a mickle'. If these steps in reasoning have the necessary nexus with the power to tax under Entry 54 List II, it passes one's comprehension how the impugned legislation can be denounced as exceeding legislative competence or as a "colourable device" or as "supplementary, not complementary'. But this is precisely what the High Court has done, calling to its aid passages culled from the rulings of this Court and curiously distinguishing an earlier Division Bench decision of that very Court - a procedure which, moderately expressed, does not accord with comity, discipline and the rule of law. The puzzle is how minds trained to objectify law can reach fiercely opposing conclusions. xxx xxx xxx 24. In a developing country, with the mass of the people illiterate and below the poverty line, and most of the commodities concerned constitute their daily requirements, we see sufficient nexus between the power to tax and the incidental power to protect purchasers from being subjected to an unlawful burden. S....
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....ffer from any ambiguity or arbitrariness. Section 171 of the Act 2017 sets out the function, duty, responsibility and power of NAA with exactitude. It stipulates that the pre-conditions for applicability of the provision are either the event of reduction in rate of tax or the availability of benefit of input tax credit (resulting in such reduction). Once the said pre- requisites/conditions exist, the direct consequence contemplated i.e. reduction of the price must follow. Therefore, if before such reduction of rate of taxes or benefit of Input Tax Credit, the price paid by the recipient inclusive of the applicable tax at the relevant time was a particular amount, then on account of the reduction of the tax rate or the benefit of the Input Tax Credit, there has to be reduction in the subject price. Further, the reduction in the tax rate or the benefit of Input Tax Credit which is mandated to be passed on to the recipient is a matter of right for the recipient and consequentially, the price reduction must be commensurate to such benefit. For instance, when the Goods and Services Tax rate on a service of Rs. 100 is 28%, the MRP of the service at which it is sold to the consumer is Rs.....
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....Government under Rule 126 of the Rules, 2017 were intended by the Legislature to be exercised by the NAA itself. In fact, in exercise of its powers under Rule 126 of the Rules, 2017, NAA has issued the 'National Anti-Profiteering Authority: Methodology and Procedure, 2018' dated 28th March, 2018. 112. The Supreme Court in Sahni Silk Mills (P) Ltd. v. ESI Corpn., (1994) 5 SCC 346 while discussing the maxim of delegatus non potest delegare has held that, "The basic principle behind the aforesaid maxim is that "a discretion conferred by statute is prima facie intended to be exercised by the authority on which the statute has conferred it and by no other authority, but this intention may be negatived by any contrary indications found in the language, scope or object of the statute". (Vide John Willis, "Delegatus non potest delegare, (1943) 21 Can. Bar Rev. 257, 259)". Therefore, the principle of delegatus non potest delegare is not applicable to the present batch of matters. 113. Further, Section 166 of the Act, 2017 provides that every rule made by the Government in exercise of its powers under Section 164 of the Act, 2017 shall be laid before each house of the Parliament and th....
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....reaches the recipient. 117. The contention of the petitioners that the fundamental presumption under Section 171 that every tax reduction must result in 'price reduction' is not correct. The use of the expression 'shall' in Section 171 of the Act, 2017 means that the supplier is required to pass on the benefit of the reduced tax rate and the benefit of Input Tax Credit, and that such passing on is to be carried out only by way of commensurate reduction of price of the goods or services. Accordingly, costing and market-related factors are irrelevant for NAA, as it is only required to examine whether or not there is any reduction in tax rate or benefit of accruing Input Tax Credits and if so whether the same has been passed on by way of commensurate reduction of prices. The NAA is not concerned with the price determined by a supplier, for the supply of particular goods or services, exclusive of the GST or Input Tax Credit component. The supplier is at liberty to set his base prices and vary them in accordance with the relevant commercial and economic factors or any applicable laws. Consequently, NAA is only mandated to ensure that the benefit of reduced rates of taxes and Input Ta....
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....y misconceived as both these judgments were passed specifically in the context of levy of taxes. As held hereinabove, Section 171 of the Act, 2017 does not levy any tax on supplies and hence these judgments do not apply to the present batch of matters. Consequently, the impugned provisions are not a price fixing mechanism and they do not violate either Article 19(1)(g) or Article 14 or Article 300A of the Constitution of India. REFERENCE TO ANTI-PROFITEERING PROVISIONS OF AUSTRALIA AND MALAYSIA IS MISCONCEIVED 122. The reference to Anti-profiteering provisions under the Australian Trade Practices Act by the petitioners is misplaced as pointed out by the learned counsel for the Respondents and as according to the petitioner's own submissions, the Australian Act prohibits 'price exploitation' in relation to the New Tax System i.e. that the Act by its nature regulates prices. This is different from Section 171 of the Act, 2017 which only requires the suppliers to pass on the benefit of tax reduction and Input Tax Credit to the recipients of the goods and services. The 'price' aspect comes into play in the context of Section 171 of the Act, 2017 only when it comes to the manner i....
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....g such consultations had been laid down. In that situation it was open to the competent authorities to evolve their own procedure. Such a procedure of taking a decision upon deliberations does not fall foul of Article 14 of the Constitution of India." 126. Consequently, Rule 126 of the Rules, 2017 to the extent it grants flexibility to NAA to determine the methodology and procedure to decide whether reduction in rate of tax or benefit of Input Tax Credit has been passed on or not to the recipient is reasonable and legal. Moreover, as per Rule 126 NAA 'may determine' the methodology and not 'prescribe' it. The substantive provision i.e. Section 171 of the Act, 2017 itself provides sufficient guidance to NAA to determine the methodology on a case by case basis depending upon peculiar facts of each case and the nature of the industry and its peculiarities. Consequently, so long as the methodology determined by NAA is fair and reasonable, the petitioners cannot raise the objection that the specifics of the methodology adopted are not prescribed. 127. Since considerable emphasis was laid by learned counsel for the Petitioners on the methodology adopted by NAA to determine commensu....
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....s and Services Tax and cost of such taxes has been built in the price of the flat by the builder. d. If the flat is constructed in the post-Goods and Services Tax period and it is purchased after construction being complete by making upfront payment of the full price, no benefit of Input Tax Credit would be available as the price of the flat would have been fixed after taking into account the Input Tax Credit which has become available to the builder in the post-Goods and Services Tax period and which was not available to him in the pre-Goods and Services Tax. 129. However, this Court finds that the methodology adopted by NAA and DGAP to arrive at the profiteering amount of the real estate industry was generally based on the difference between the ratio of Input Tax Credit to turnover under the pre-Goods and Services and Tax and post- Goods and Services and Tax period. This Court is in agreement with the contention of the learned counsel for the petitioners representing the real estate companies that the methodology adopted by NAA is flawed as in the real estate sector, there is no direct correlation between the turnover and the Input Tax Credit availed for a particular....
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....on of the tax rate or the benefit of Input Tax Credit must not only be reflected in reduction of prices but it must also reach the recipient of the goods or services. Such a mandate cannot be tampered with by the supplier by substituting the benefit in the form of reduction of actual price with any other form such as increase in volume or weight or by supply of additional or free material or festival discount like 'Diwali Dhamaka' or cross-subsidisation. 132. Further, the requirement that the benefit of the rate reduction and Input Tax Credit reach the final consumer by way of 'cash in hand' through commensurate reduction in prices, cannot be said to be manifestly arbitrary. No fundamental or other rights of any of the petitioners are being affected in any manner by requiring that the benefit in reduction of tax rate or Input Tax Credits, be passed on to the recipients by way of commensurate reduction in prices. 133. This Court is in agreement with the submission of Mr. Zoheb Hossain, learned counsel for the Respondents, that the benefit of tax reduction has to be passed on at the level of each supply of SKU to each buyer and in case it is not passed on, the profiteered amoun....
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....licability to the obligation under Section 171 of the Act, 2017 as the former only confers a discretion on the buyer to reduce the contract price to the extent of reduction in taxes, whereas Section 171 imposes a positive obligation on the supplier to make a commensurate reduction in the price when the Government reduces the rate of tax. Therefore there is no inconsistency between the two laws. 137. Moreover, the CGST/SGST Acts, 2017 are independent Acts and there is no provision under these Acts that tax reduction ordered under these Acts would be subject to the provisions of Sale of Goods Act, 1930 or the Indian Contract Act, 1872. Tax reduction is given by sacrificing tax revenue and hence the Governments are legally competent to direct the suppliers to pass on the benefit of such tax reduction to the consumers after its notification. Any contract made in violation of public policy of passing on the benefit would be void. Consequently, all contracts (a) whether they are pending to be performed or (b) executed after tax reduction and/or (c) have already been concluded before tax reduction, have to implemented keeping in view the mandate enshrined in Section 171 of the Act, 201....
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....got to take into account normal human behaviour and not behaviour which is abnormal. It is not every fancied possibility of discrimination but the real risk of discrimination that we must take into account. This is not one of those cases where discrimination is writ large on the face of the statute. Discrimination may be possible but is very improbable. And if there is discrimination in actual practice this Court is not powerless. Furthermore, the fact that the Legislature considered that the ordinary procedure is insufficient or ineffective in evicting unauthorised occupants of Government and Corporation property and provided a special speedy procedure therefore is a clear guidance for the authorities charged with the duty of evicting unauthorised occupants. We, therefore, find ourselves unable to agree with the majority in the Northern India Caterers case." (emphasis supplied) B. In Collector of Customs v. Nathella Sampathu Chetty, 1962 SCC OnLine SC 30 , the Supreme Court has held as under:- "34....This Court has held in numerous rulings, to which it is unnecessary to refer, that the possibility of the abuse of the powers under the provisions contained....
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.... Lakshmindra Thirtha Swamiar of Sri Shirur Mutt [1954 SCR 1005 : AIR 1954 SC 282] (SCR at p. 1030)." (emphasis supplied) TO NOT COMPARE TAXES LEVIED AFTER THE INTRODUCTION OF THE ACT, 2017 WITH A BASKET OF DISTINCT INDIRECT TAXES APPLICABLE BEFORE THE OPERATION OF THE ACT WOULD GO AGAINST THE INTENT AND OBJECTIVE OF ACT, 2017. 139. Prior to coming into force of the Act, 2017, several taxes were levied on goods and services by the Central Government (such as Central Excise tax, Service tax, Central Sales tax etc.) and by the State Government (such as Value Added tax, Luxury tax, Purchase tax etc.). There was multiplicity of taxes as they were levied on the same supply system. This had a cascading effect as there was no provision for set off. The Hon'ble Prime Minister at the launch of Goods and Services Tax stated "If we take into consideration the 29 states, the 7 Union Territories, the 7 taxes of the Centre and the 8 taxes of the States, and several different taxes for different commodities, the number of taxes sum up to a figure of 500! Today all those taxes will be shred off to have ONE NATION, ONE TAX right from Ganganagar to Itanagar and from Leh to Lakshdweep".....
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....arify that a right to appeal is a creation of Statute and it cannot be claimed as a matter of right. The right to appeal has to exist. It cannot be created by acquiescence of the parties or by the order of the Court. It is neither a natural nor an inherent right attached to the litigant being a substantive, statutory right. [See: United Commercial Bank Ltd. v. Their Workmen, AIR 1951 SC 230; Kondiba Dagdu Kodam v. Savitribai Sopan Gujar, AIR 1999 SC 2213; and UP Power Corporation Ltd. v. Virenddra Lal, (2013) 10 SCC 39]. Jurisdiction cannot be conferred by mere acceptance, acquiescence, consent or by any other means as it can be conferred only by the legislature as conferring jurisdiction upon a Court or Authority, is a legislative function..." (emphasis supplied) 144. Further, the decisions of NAA are subject to judicial review under Article 226 before the jurisdictional High Courts as is evident from the fact that several petitions have been filed before this Court challenging orders of the NAA. This shows that the affected parties are exercising their right to seek remedies under Article 226 against orders of NAA. 145. Consequently, a robust mechanism in conformit....
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.... the Information Commission." 149. Similarly, statutory bodies like TRAI, Medical Council of India, Institute of Chartered Accountant of India etc., perform quasi-judicial functions but do not have judicial members. Furthermore, Assessing Officers, CIT(Appeals) and the Dispute Resolution Panel under the Income Tax Act, 1961 all perform quasi- judicial functions but there is no requirement that such members must possess either a law degree or have judicial experience. Consequently, this Court is of the view that there is no requirement for a judicial member in NAA. 150. While this Court is in agreement with the submission of the Petitioners that the provision of a second or casting vote to the Chairman in the event of a tie/equality of votes as was given in Rule 134(2) of the Rules, 2017 is impermissible, yet as the Respondents have stated that the said provision has never been used, this Court does not deem it necessary to delve into a detailed discussion of the same. 151. Additionally, the Petitioners have challenged the validity of the constitution of the NAA on account of absence of a gazette notification as allegedly required under Section 171(2) of the Act, 2017. This....
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..... (2) Without prejudice to the generality of the provisions of sub-section (1), the Government may make rules for all or any of the matters which by this Act are required to be, or may be, prescribed or in respect of which provisions are to be or may be made by rules. (3) The power to make rules conferred by this section shall include the power to give retrospective effect to the rules or any of them from a date not earlier than the date on which the provisions of this Act come into force. (4) Any rules made under sub-section (1) or sub-section (2) may provide that a contravention thereof shall be liable to a penalty not exceeding ten thousand rupees." 155. Accordingly, Rule 133(3)(b)&(d) of the Rules, 2017 which empower the authority to levy interest @ 18% from the date of collection of the higher amount till the date of the return of such amount as well as imposition of penalty are intra vires and within the Rule making power of the Central Government. 156. Moreover, as pointed out by Mr. Zoheb Hossain, the show cause notices initiating penalty proceedings in relation to violation of Section 171(1) prior to the coming into force of Section 171(3A)....
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....is widely worded and does not limit the scope of examination to only goods and services in respect of which a complaint is received. The scope of powers of the DGAP is provided for in Rule 129 of the Rules, 2017. From a reading of the said Rule especially the expression 'any supply of goods or services' used in sub-rule (2) of Rule 129, it is apparent that the scope of the DGAP's powers is very wide and is not limited to the goods or services in relation to which a Complaint is received. The word 'any' includes within its scope 'some' as well as 'all'. 160. In any event, the ignorance of the consumer or lack of information or surrounding complexity in the supply chain cannot be permitted to defeat the objective of a consumer welfare regulatory measure and it is in this light that the subject provision is required to be construed. 161. In the context of similar powers of investigation exercised by the Director General under the Competition Act, 2002, the Supreme Court in Excel Crop Care Ltd. vs. Competition Commission of India, (2017) 8 SCC 47, has held that the Director General would be well within its powers to investigate and report on matters not covered by the complaint o....