TaxTMI 
TaxTMI 
2025 (9) TMI 1045
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.... license for exhibition of Cinematography films. 3. A proceeding has been initiated and we are to decide whether there has been a profiteering to the tune of Rs. 16,50,166 /- only by not passing on the reduction of rates of GST, on cinema tickets for exhibition of cinematography films, to the consumers. 4. The facts of the case can succinctly stated as follows:- (i) On 01.07.2017, the Central Goods & Services Tax Act, 2017, hereinafter referred as CGST Act, came into force. Initially, the rates of GST on the tickets for admission to the theatres exhibiting cinematography films were 28% for the price range of Rs. 101/- or more. It was 18% for the tickets has been priced at Rs. 100 or less per person, per show. (ii) On the recommendation of the GST Council, the rates were reduced from 28% & 18 %, to 18% & 12% for the aforesaid rates of tickets w.e.f. 01.01.2019 vide notification no. 27/2018-CT (Rate) dated 31.12.2018. 5. On 29.03.2019, an application was received by the Standing Committee of the Anti-Profiteering wing of GST Regime from the Pr. Commisioner, Medchal Commissionerate, Hyderabad, inter-alia alleging profiteering by the Respondent. The Standing ....
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....P dated 31.10.2016. We consider it appropriate to quote the same:- "10..... (ii) Both the Government are directed to constitute their respective committees headed by the respective Principal Secretaries for Home. In so far as the other members of the Committees are concerned. It is left open to the respective Principal Secretaries for Home to choose the exhibitors, distributors and other member to participate in the committee so as to adjudicate the issues involved in all the writ petitions. ... (v) The petitioners - theatres are permitted to run their respective theatres by collecting their proposed fares. However, it is made clear that the petitioners shall inform to the Authorities concerned as to the ticket rates, which they intend to collect in respect of all classes till adjudication of the issues in question by the respective committees. ... (vii) It is made clear that the petitioners in the writ petitions, in which there are no such earlier interim orders, shall approach the authorities concerned and inform them as to the rates of the tickets, which they intend to collect. 10. It is, therefore, contended that the Hon'....
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.... and Air Cooled Theatres and from Rs. 2/- to Rs. 5/- for non-AC Theatre. It was classified as a "tax free maintenance Charge". The Respondent claim that as it runs a AC theatres, it is entitled to charge a sum of Rs. 7/- per ticket as tax-free maintenance charges. However, it has continued to charge a sum of Rs. 3/- per ticket in order to ensure that its prices remain competitive. The DGAP, allegedly, has not taken it into a consideration, therefore, committed an error. 14. The third limb of submissions of Respondent is that the DGAP has misconstrued the scope and ambit of Section 171 of the CGST Act. In expanding this third limb of submission, the Respondent would submit that the provision has been misinterpreted by the DGAP inasmuch as it has interpreted it to mean that any reduction in the rate of tax must be passed in its entity to the recipient of goods and services. Respondent would further submit that it is not the case, as is made evident by the use of the word "commensurate". The Respondent would further submit that if the intention of the legislature to pass on the benefit of any reduction of tax on an as is basis, they would not have use the word "commensurate". Use o....
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.... India Pvt. Ltd. & Ors. Vs. Union of India & ors SCC Online Del 588. 18. This matter was heard on 23.07.2028 and reserved for judgement to be pronounced on 20.08.2025. However, a question arose before the Tribunal that the jurisdiction of the tribunal or the authority to direct the payment of interest at the rate of 18% on the profiteered amount, was inserted in clause (c) of Sub Rule (3) of Rule of 133 of the CGST Rules, 2017 vide Notification No. 31/2019-Central Tax, dated 28.06.2019, with effect from 28.06.2019. This issue was never been decided by this Tribunal or any of its preceding Authorities i.e. erstwhile NAA or CCI. 19. Since we thought that it is a question of seminal importance, we directed to both parties to address the Tribunal on this issue on 20.08.2025. However, on that day, learned counsel for the Respondent was not present. We considered it appropriate to grant another opportunity to the learned counsel to advance his arguments on this issue and, therefore, the matter was again listed on 03.09.2025. On 03.09.2025, learned counsel appeared and submitted that provision for imposition of interest on the profiteered amount is prospective as it is an enabling p....
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.... for these three categories of the tickets are Maharaja Circle- Rs. 130, 120 & 100, Dress Circle-Rs. 80 & 70 and First Class-Rs. 40 & 30. The Respondent was also collecting a sum of Rs. 3/- per ticket as tax free maintenance charge. Thus, the price inclusive of all taxes and charges of tickets for three categories like Maharaja Circle- Rs. 115 & 97, Dress Circle-Rs. 67/- and for First class Rs. 27/- in the pre-rate reduction period. The price of these three categories of tickets in the post-rate reduction period w.e.f. 01/01/2019 are Maharaja Circle- Rs. 127, 117 & 97, Dress Circle-Rs. 77 & 67 and First Class-Rs. 37 & 27 after the post-rate reduction. It is also borne out form the record and submission made in the report of the DGAP that there is no law that enable the Respondent not to pay GST on the amount of Rs. 3/- collected as tax free maintenance charge per ticket. Therefore, the amount of Rs. 3/- collected as tax free maintenance charge per ticket, need to be taken into consideration by the Respondent while discharging their output tax liability and also for determination of price of ticket when the GST rate was reduced from 28% to 18% from 18% to 12% w.e.f. 01.01.2019. 2....
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.... Table-B S.No. Admission ticket 01.01.2019 to 30.06.2019 Base Price charged (Rs.) Commensurate Base Price (Rs.) Excess amount charged per ticket (Rs.) Excess tax charged per ticket @ 18% or 12% Total Profiteering per ticket (Rs.) Total tickets sold Total Profiteering (including tax @18%) (in Rs.) A B C D E= (C-D) F= (E*18% or 12%) G= (E+F) H I= (H*G) 1 Maharaja Circle (Blockbuster Movie) 110.17 92.19 17.98 3.24 21.22 18,849 3,99,952 101.69 92.19 9.51 1.71 11.22 27,696 3,10,715 Maharaja Circle (Other Movie) 89.29 84.75 4.54 0.54 5.08 78,774 4,00,546 2 Dress Circle 71.43 59.32 12.11 1.45 13.56 17,962 2,43,553 62.50 59.32 3.18 0.38 3.56 31,351 1,11,588 3 First Class 35.71 25.42 10.29 1.23 11.53 11,954 1,37,775 26.79 25.42 1.36 0.16 1.53 30,180 46,037 Grand Total 16,50,166 25. It is also noted here that neither in their written submission nor in the course of argument the learned Counsel ever disputed this calculati....
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....o and depend upon market forces and dynamics of the industries in which the supplier is operating. Section 171 reads as follows:- 'Section 171 and sub-section (1) reads as follows:- "Any reduction in rate of tax on any supplier of goods or services or the benefit of Input Tax Credit shall be passed on to the Recipient by way of commensurate reduction in prices." In interpreting this provision the Hon'ble High Court of Delhi, in the case of Reckitt Benckiser India Pvt. Ltd. Vs. Union Of India and other cases, 2024 SCC Online Del 588, has held that the supplier is required to pass on the benefit of reduced tax to the consumer and such passing is to be carried out only by way of commensurate reduction of prices of the Goods and Services. However, the supplier is at liberty to set his base price and vary them in accordance with the relevant commercial and economic factors or any applicable laws. However, such exercise of raising the prices based on commercial factors should be a genuine exercise of rising of prices and not a mere pretence. The Hon'ble Delhi High Court further held that if there is any variance on account of other factors, such as any cost necessita....
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.... admitted. The Supreme Court went on to make a critical distinction between judicial admissions or admissions in pleadings/ compromise and evidentiary admission. Judicial admissions are under Section 58 of the Indian Evidence Act, 1872 corresponding to Section 53 of the Bharatiya Sakshya Adhiniyam, 2023. It provides that facts admitted need not to be proved. Such judicial admissions are binding on the parties who make them and constitute a waiver of proof. Evidence or evidentiary admissions in contrast, are admissible in trial but not conclusive. In this case, a written document has been placed before us, paragraph 25, as quoted is in the preceding paragraph contains a clear admission that the theatre owner wanted to make some profit in the competitive world and, therefore, it has to be taken either as a judicial admission or an evidentiary admission. If it is taken as a quasi-judicial admission then it is binding on the Respondent. However, for the sake of consideration if it's considered to be an evidentiary admission, then also there is no other material to show that such an admission is factually incorrect. In fact, the Respondent have not made any efforts to show that it is an....
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....t to follow, not the past, and such presumption operate unless shown to the contrary by express provision in the Statute or otherwise discernable by necessary implication (Monnet ISPAT and Energy Ltd., vs UOI, (2012) 11 SCC 1) wherein the Supreme Court has held that there is no indication in Section 17/A of mines and minerals (Developments and Regulation) Act, 1957 or the amending act of 1987, which inserted Section 17/A that Parliament intended to undo the State of Affairs prior of 1987 by virtue of the same. Therefore, by applying the presumption prospectivity the Supreme Court held that the Provision was effective from 1987 and has no retrospective operation. Taking the legal question from the different angle the courts in India as well as in United Kingdom has always held that whenever any Act or enactment effects any vested rights or impede a new burden on a person or impose existing application on one person against another person or class of person or society in general, then unless a contrary is provided in the statute itself by express provision or is clearly decipherable by necessary implication then such law effecting substantive right shall have prospective operation. T....
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..... 927.(E)- In exercise of the powers conferred by rule 5 of the Central Goods Services Tax (Fourth Amendment) Rule, 2019, made vide notification No.31/2019 - Central Tax, dated the 28th June, 2019, published in the Gazette of India, Extraordinary, part II, Section 3, Sub- section (i), vide number G.S.R 457(E), dated the 28th June, 2019, the Government on the recommendation of the Council, hereby appoints the 1st day of April 2020, as the date from which the provisions of the said rule, shall come into force." 13. Dealing with a similar question the Constitution Bench of Supreme Court of India in C.I.T. (C-1) New Delhi Vs. Vatika Township Pvt. Ltd, (2015) SSC-1, considered whether the amendment to the provisions of Section 113 of the Income Tax Act, inserted by the Finance Act, 2002 is to operate prospectively or it is a clarificatory and curative in nature, and, therefore, has retrospective operation. While considering this issue the Hon'ble Supreme Court has held that a plain reading of the aforesaid statutory provision, it is clear that though the provision of surcharge under the Finance Act has been in existence since 1995, in so far as levy of surcharge on block assess....
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.... 17. Though in some case and also in case of Vatika Township (Supra), it has been observed that where a benefit is conferred by legislation, the rule against a retrospective construction is different. However we are not concerned about any such doctrine retrospective conferring beneficial fruits of legislation rather than in this case we are confronted with the question of retrospectively of a new liability. 18. On the contrary, it is a provision which onerous to the assessee. Therefore, in a case like this, the normal rule of presumption against retrospective operation is applicable. The Rule against retrospective operation is a fundamental rule of Law that no statute shall be constructed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. 19. Dogmatically framed, the rule is no more than a presumption, and thus could be displaced by outweighing factors. The outgoing or rebutting factors may be found in the statute itself as mentioned by Justice G. P. Singh in his book on Interpretation of Statute, but it is not always the guiding factors. Sometimes th....
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.... by the Learned Counsel of the Respondent is partially acceptable and partially non-acceptable. That is to say that we agree to the argument advanced by the Learned Counsel for the Respondent that the provision for imposition 18 per cent interest on the profiteered amount shall come into force only to those cases which fall after the notification on the Amending (Fourth) Rule came into force, that is 28.06.2019 and not on 1st April, 2020, as argued by the Learned Counsel. However, in this case profiteering took place much prior to date of coming into force of such provision for levying interest and in view of the constitution Bench judgment of the Supreme Court in the case Vatika Township Pvt. Ltd. (Supra)., we are of the opinion this is not the fit case where Respondent should be directed to pay any interest on the profiteered amount. 32. Thus, the argument advanced by the learned Counsel for the respondent that such a provision which is enabling provision and not a clarificatory or curative provision, should be applicable only prospectively is correct but the second limb of contention that it shall be applicable from 01.04.2020 is not acceptable. It has not been accepted by us....