AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1556
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....171 of the CGST Act becomes unenforceable? III. Whether the report submitted by the Standing Committee on the basis of which entire investigation carried out, was barred by limitation; and whether the authority has no power to condone the delay in filing the report by the Standing Committee? IV. Whether the DGAP erred in facts and in law in comparing the weighted average base price with actual sale price? V. Whether the Respondent No. 2 had profiteered an amount of Rs.19,32,446/-, by not passing the benefit of reduction of the Rate of GST, on product After-Shave Lotion 'Park Avenue Good Morning 50ml', from 28% to 18% with effect from 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017? 2. It may be noted that there is no dispute with regard to the fact that the rate of GST on product After-Shave Lotion was reduced from 28% to 18% with effect from 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017; and that the unit sale prices of the said product of the Respondent No. 2 remained unchanged even after the said reduction of rate of GST. 3. The facts of the case, shorn of unnecessary details are as fo....
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....average base price (after discount) was obtained after dividing the total taxable value by the total quantity of this item sold during the period. The average base price of this item was compared with the actual selling price of this item sold through same channel during the post-GST rate reduction period i.e. on or after 15.11.2017 as has been illustrated in the Table 'A' below:- Table 'A' (Amount in Rs.) SI.No. Description Factors Pre rate reduction (01.11.2017 to 14.11.2017) Post rate reduction (from 15.11.2017) 1 Product Description (Item Code) A PA Asl Good Morning Splash 50 ml (MRP 115/- (NPAASG050008) 2 Channel B General Trade (GT) 3 Total quantity of item sold C 2,220 4 Total taxable value (after Discount) D 1,58,322/- 5 Average base price (without GST) E=(D/C) 71.32/- 6 GST Rate F 28% 18% 7 Commensurate Selling Price (post rate reduction) (including GST) G=118% of E 84.15/- 8 Invoice No. H GWTSSI180566 9 Invoice Date I 21.11.2017 10 Total quantity (as per invoice indicated in H)....
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....e NAA, it reads as follows: "113. Accordingly, the amount of profiteering in respect of Respondent No. 1 [ Helen Cutia] is determined as Rs. 18,48,34,084/- including the GST under the provisions of Rule 133 (1) of the CGST Rules, 2017." "114. The profiteered amount in respect of the Respondent No. 2 [ Sai Kripa] is determined as Rs. 38,64,891/- in terms of Rule 133(1) of the CGST Rules, 2017". "115. The Respondent No. 1 has also profiteered an amount of Rs. 8,97,253/- from the Respondent No. 2 as has been mentioned in the DGAP's Report dated 24.09.2019. Since, the above amount is required to be passed on to the ultimate buyers hence, the same shall be deposited in the CWFs of the Central and the State Governments as per the provisions of Rule 133 (3) (C) of the CGST Rules, 2017 along with the interest and shall not be passed on to the Respondent No.2 as he is not eligible to get the benefit of tax reduction at the expense of the common recipient". 4. The Respondent No. 1 filed Writ Petition (C) No. 8161/2020 before the hon'ble Delhi High Court and challenged the Final order dated 11.05.2020 passed by erstwhile NAA. The Respondent No. 1 also contended b....
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....d actual base price - party wise with actual sales price - party wise. h. Arithmetical and clerical errors which were apparent on the face of the record had been committed while computing the profiteered amount. Each transaction had been erroneously taken twice while computing the profiteered amount. i. DGAP erred in facts and in law in including the additional tax in the profiteered amount, although the said amount was duly deposited by the Respondent No. 2 with the government. j. Profiteered amount could not be calculated both in the hands of the principal company as well as in the hands of the Respondent No. 2 for the same transaction. Profiteering could not be computed at each stage of supply chain:- The actual purchase price of the Respondent No. 1 from Respondent No. 1 for the period 01.11.2017 to 14.11.2017 (pre-reduction rate period) in respect of the product PAASLACE SPLASH 50ML and the actual profit in respect of this product for the pre-reduction period as well as the post-reduction period is explained hereunder:- PRODUCT: PA ASL ACE SPLASH 50ML TO PARTY NAME: FUTURE RETAIL LTD Before Rate Change Purchase Price without Tax ....
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....le calculating profiteering amount. l. That out of all the distributors of the company Respondent No. 1 had been singled out and tax had been levied only on the Respondent No. 1:- The Respondent No. 1 to be correct and in case all the grounds raised by the Respondent No. 2 were held to be liable to be rejected still the profiteered amount, if any worked out to Rs. 16,43,797/- as follows:- S.No. Particulars Amount 1. Profiteered amount calculated by DGAP and as accepted by DGAP as per Annexure 34 of the report of the DGAP 38,64,891/- 2. Profiteered amount after rectification of the clerical mistake i.e. after deleting the entries considered twice 19,38,579/- Less: Tax amount included in the profiteered amount which was paid to the Government. Calculation at Para 106 (Rs. 5,89,560/2). (-) 2,94,780/- Total: 16,43,799/- 7. A copy of the above submissions dated 02.12.2020 filed by the Respondent was supplied to the DGAP for the clarifications under Rule 133(2A) of the CGST Rules, 2017. The DGAP filed his clarifications dated 17.12.2020 on the Respondent No. 2's submissions, shorn of unnecessary details, are as foll....
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....ation due to increase in base prices of the products or in other words, the Revised Profiteering amount came to Rs.. 19,32,446/-. The Place (State) wise breakup of this amount is furnished in the Table-'A' given below:- S.No. Name of State State Code Profiteering (Rs) 1 Delhi 07 19,02,069 2 Haryana 06 26,458 3 Uttar Pradesh 09 3,919 Grand Total 19,32,446 f. For the contention raised by the Respondent that the DGAP erred in including the additional tax in the profiteered amount, although the said amount was duly deposited by the Respondent No. 2 with the government, the DGAP clarified that the issue raised by the Respondent No. 2 had been duly addressed by the Authority in Para-87 of its Final Order No. 25/2020 dated 11.05.2020, which reads as "The Respondent No. 1 has also profiteered an amount of Rs. 8,97,253/- from the Respondent No. 2. Since, the above amount is required to be passed on to the ultimate buyers hence; the same shall be deposited in the CWFs of the Central and the State Governments as per the provisions of Rule 133(3)(c) of the CGST Rules, 2017". g. For the averment made by the Responde....
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....he same has been filed by the Respondent vide email dated 17.01.2026. The additional issues raised by the Respondent no. 1 are as follows: - I. The case of the respondent is distinguishable from the factual matrix in the matter of DGAP V.s Raj & Co. II. the failure of the appellant to ascertain which products were procured by the respondent from M/s J.K. Helene Curtis Ltd. before the rate reduction and after the rate reduction cannot be a ground to recover the alleged profiteered amount from the respondent which has already been recovered from M/s J.K. Helene Curtis Ltd. III. The appellant has erred in facts and in law in calculating the profiteered amount for a large period of almost one and a half year. the period for which investigation was carried out and for which the alleged profiteered amount has been computed has been calculated in an arbitrary and whimsical manner without statutory backing and without the support of precedents. IV. The appellant has erred in facts and in law in comparing the weighted average base price with actual sale price rather than comparing weighted average base price with weighted average sale price or ought to ha....
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....eptable. 14. Coming to the question of limitation as mentioned in question III of this order, we see that there is no time limit fixed for the calculation of the profiteered amount. Furthermore, in paragraph 158 of the aforesaid Judgment of the Delhi High court in Reckitt Benckiser India Pvt. Ltd., Vs. Union of India, W.P (C) No. 7743/2019, dated 29.01.2024, it is held that the Rules though prescribe a timeline, it is important to note that the Rules, 2017 do not provide any consequences in case the time limits provided thereunder lapse. The National Anti-Profiteering provisions as the Act, 2017 and the Rules, 2017 are in the nature of a beneficial legislation as they promote consumer welfare. The Courts have consistently held that beneficial legislation must receive liberal construction that favours the consumer and promotes the intent and objective of the Act. That being the scenario, it cannot be said that the proceedings as a whole abate on lapse of time limit of furnishing of report by DGAP. The Supreme Court in P.T. Rajan. T.P.M. Sahir and Ors. (2003) 8 SCC 498 has held that "It is well-settled principle of law that where statutory functionary is asked to perform a statuto....
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....he opinion that as the remand was an open remand without any specific restriction on the NAA or NAPA or the authority exercising Anti-Profiteering Jurisdiction. Quasi-Judicial Order passed by the preceding Authority to the DGAP for clarification will not attract limitation and it cannot said that the proceedings are barred by the limitation. 21. As far as question no. IV is concerned, the Learned counsel for the Respondent no. 1 submitted that the comparison of the weight average base price with actual sale price is incorrect. We may note here that respondent in the written arguments submitted after the closing of the argument at paragraph B5 at page eleven admitted that total profiteering amount of Rs.18.48 Cr. has been confirmed against M/s J.K. Helene Curtis Ltd. by the Ld. National Anti-Profiteering Authority vide Order No. 25/2020 dated 11.05.2020. The Respondent was also a party to the proceedings, and the Appellant had submitted therein that an amount of Rs. 8,97,253/- was profiteered by M/s J.K. Helene Curtis Ltd. from the Respondent. 22. Thus, it can be inferred by the Tribunal at this stage that the method of calculation of profiteering by the DGAP is faulty. It is ....
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....r the rate reduction cannot be a ground to recover the alleged profiteered amount from the Respondent which has already been recovered from M/s J. K. Helene Curtis. Ltd. 27. This issue has already been discussed by us earlier. After remand DGAP has taken into account duplication of invoices calculating the profiteering amount by the principal and retailer. In that view of the matter, DGAP reduced the profiteered amount 38,64,891/-. to 19,32,446/-. Thus, it cannot be said that the methodology adopted by DGAP is wrong in any way. 28. The next argument that the DGAP erred in facts and in law in calculating the profiteered amount for a last period of almost one and a half year, and that it compared the weighted average base price with actual sale price rather than comparing the weighted average base price has already been decided by us in the different cases. We find that this method of calculating the profiteered amount cannot be found a faulty one, resulting in a miscalculation of profit. 29. The Respondent has further stated that DGAP has erred in facts and in law in including the additional tax in the profiteered amount, although the said amount was duly deposited by the R....
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.... 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 the way of commensurate reduction of prices. The NAA is not concerned with the price determined by the 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 mandated only to ensure that the benefit of reduced rates of taxes and Input tax Credit is passed on. NAA cannot force the petitioners to sell their goods or services at reduced prices. The Delhi High Court is further of the view that the manufacturer/supplier despite reduction on rate of tax or benefit of Input Tax Credits can raise the prices based on commercial factors, as long as the same is not a pretence. The Court took note of the concession made by the Counsel appearing for the Revenue that in some cases, commercial factors might necessitate an increase in price despite reduction in rate of tax or increase in availability of benefit of Input Tax Credit. 34. The ....