TaxTMI 
TaxTMI 
2026 (5) TMI 1351
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....roject "Siddha Sky" situated in Kolkata. 2. The Complainant alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in prices, despite charging GST at the effective rate of 12% on the payments due, thereby contravening the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act, 2017'). 3. The complaint was examined by the Standing Committee on Anti-Profiteering, which, on 28.06.2019, referred the matter to the Director General of Anti-Profiteering (hereinafter referred to as 'the DGAP') for a detailed investigation under Rule 129(1) of the CGST Rules, 2017. 4. Pursuant to the reference, the DGAP conducted an investigation and submitted a report dated 19.03.2020 to the erstwhile National Anti-Profiteering Authority (NAA). The DGAP, in its report, concluded that the Respondent had benefited from an additional ITC of 2.45% of its turnover post-GST and had profiteered an amount of Rs. 1,88,44,127/-, which included GST @12% on the base profiteered amount. 5. The NAA, after considering the Respondent's submissions, vide its Internal Order No. 31/202....
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.... - 3. Net ITC of GST Availed - Rs. 35,75,27,423 4. Ratio of Credit Availed to Purchase Value (in %) 5.46% 14.15% 11. Based on the above, the DGAP concluded that the Respondent had benefited from an additional ITC of 8.69% in the post-GST period. The DGAP further computed that out of the total 340 units in the project, with a total saleable area of 7,16,545 Sq. Ft., only 9 eligible pre-GST home buyers with a total area of 18,627 sq. ft. were entitled to the benefit, as all other categories of buyers, post-GST were held to be outside the scope of investigation. 12. The DGAP accordingly determined that the Respondent had profiteered an amount of Rs. 57,08,244/-, and after adding GST @12% of Rs. 6,84,989/-, the total profiteered amount was Rs. 63,93,233/-. This amount was directed to be passed on to the 9 eligible home buyers, which included the Complainant. 13. The Respondent filed rejoinders dated 05.02.2026 & 23.03.2026 and earlier submissions on 05.01.2026 and 02.01.2026, raising the following defences: a) The Respondent vehemently denied the liability to pay interest. It was submitted that Section 171 of the CGST Act does not provide for....
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....s and have been upheld by the Hon'ble Delhi High Court in the Reckitt Benckiser case. He further submitted that the Rule has always contained a provision for interest and was not inserted retrospectively, as claimed by the Respondent. b) The Complainant filed an application for rectification dated 08.01.2026, contending that the order dated 06.01.2026 contained an error as he was present for the virtual hearing but was not admitted. He also challenged the improper acceptance of the Respondent's delayed submissions, which were filed without any application for condonation of delay, in violation of the Tribunal's direction dated 29.10.2025. c) The Complainant submitted that the time limit prescribed under Rule 128 for the Standing Committee to refer a matter is directory and not mandatory. He argued that no person should be penalized for the procedural delays of a statutory authority, relying on the principles of nemo punitur pro aliena delicto and lex non cogit ad impossibilia. d) The Complainant refuted the Respondent's allegation that his submissions were "AI-generated" and vague, asserting that his arguments were based on statutory provisions and judici....
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..... Such a provision would be directory in nature. It is well settled principle of law that where a statutory functionary is asked to perform a statutory duty within the time prescribed therefor, the same would be directory and not mandatory." 17.3 Further, the Hon'ble Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India [2024 SCC OnLine Del 588] observed as follows: "158. ...It is important to note that the Rules, 2017 do not provide any consequence in case the time limits provided thereunder lapse. As held earlier, the anti-profiteering provisions in 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 proceedings as a whole abate on lapse of the time limit of furnishing of report by DGAP." 17.4 Applying the ratio of the aforesaid judgments to the present case, it is evident that the timeline prescribed under Rule 128 is directory in nature. Consequently, the present proce....
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....gued that he is not liable to pay any interest on the profiteered amount. The primary contention is that Section 171 of the CGST Act, 2017 does not provide for the levy of interest, and that Rule 133, being a delegated provision, cannot travel beyond the parent statute. The Respondent has also contended that the interest provision under Rule 133(3)(c) was introduced only on 28.06.2019 and cannot be applied retrospectively. 19.2 On the first contention regarding the power to levy interest, the Hon'ble Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India [2024 SCC OnLine Del 588] conclusively settled the matter in paragraph 153, observing as under: "153. This Court is of the view that Section 171 of the Act, 2017 is broad enough to empower the Central Government to prescribe penalty and interest to ensure that the suppliers are deterred from pocketing the benefits meant for the consumers when taxes amounts so pocketed by the supplier/registered person would not have a sufficient deterrent effect on deviant behavior unless interest and penalty are levied to prevent such actions from taking place in the first place. The width and amplitude of Section 171 ....
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....t 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." 20.3 Accordingly, the Respondent is liable to pay a penalty equivalent to 10% of the profiteered amount for the period from 01.01.2020 onwards. However, the proviso to Section 171(3A) grants an opportunity to the Respondent to avoid the levy of penalty by depositing the entire profiteered amount of Rs. 63,93,233/- within thirty days from the date of this Order. Order 21. In light of the foregoing discussions, the investigation report of the DGAP dated 18.12.2024 is hereby accepted. The Respondent, M/s. Siddha Infradev LLP, is found to have contravened the provisions of Section 171 of the CGST Act, 2017 by not passing on the benefit of additional ITC to the eligible homebuyers. 22. The Respondent is directed to refund the total profiteered amount of 63,93,233/- (Rupees Sixty-Three Lakhs Ninety-Three Thousand Two Hundred and Thirty-Three Only), comprising a base profiteered amount of Rs. 57,08,244/- and GST @12% amounting to Rs. 6,84,989/-, to the 9 eligible homebuyers as detailed in the DGAP....