TaxTMI 
TaxTMI 
2026 (10) TMI 209
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....dit in respect of Unit No. 7/1F(15) in the project namely "Atri Green Valley." 2. The Standing Committee on Anti-profiteering examined the application and observed that the Respondent had not passed on the benefit of additional Input Tax Credit to the Applicant by way of commensurate reduction in price and accordingly forwarded the matter to the DGAP for detailed investigation under Rule 128 of the CGST Rules, 2017. 3. The DGAP submitted an Investigation Report dated 14.07.2021 under Rule 129 of the Central Goods and Services Tax Rules, 2017, before the erstwhile National Anti-Profiteering Authority (NAA). 4. Tenure of the NAA ended on 30.11.2022. Thereafter, the Competition Commission of India ('hereinafter referred as to "the CCI" ') was empowered to examine matters related to Anti-profiteering with effect from 01.12.2022 vide Notification No. 23/2022-Central Tax dated 23.11.2022. 5. The CCI vide letter dated 20.03.2024 remanded back the matter to the DGAP under Rule 133(4) of the CGST Rules, 2017 to re-investigate as the methodology adopted by DGAP was held to be flawed by Hon'ble High Court of Delhi in the matter of "Reckitt Benckiser India Pvt. Ltd. v. Union of Ind....
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....t has contravened the provisions of Section 171 of the CGST Act, 2017. 7.3 The Central Government on recommendation of the GST Council, had levied 18% GST (effective rate was 12% in view of 1/3rd abatement for land value) on construction service, vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The effective GST rate was 12% for flats. Accordingly, based on the figures contained in Table-'A' above, the comparative figures of the ratio of input tax credit availed to the purchase value in the pre-GST and post-GST periods, the recalibrated base price and the excess realization (profiteering) during the post-GST period, are tabulated in Table-B below: - Table-'B' (Amount in Rs) Sl. No. Particulars Post-GST 1 Period A July, 2017 to March, 2019 2 Ratio of Credit availed to Purchase Value as per Table - A above (%) B 2.37/8.42 3 Increase in input tax credit availed post-GST (%) C 6.05 4 Purchase Value of Goods and Services (Excluding Taxes and Duties) during Post-GST Period D 14,74,86,859 5 Total Savings on account of additional ITC benefit E = D*C/100 89,22,955 6 Total Saleab....
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....tigation without a fresh reference from the Standing Committee under Rule 128 and no such reference was obtained. 10.3 DGAP report dated 14.07.2021 beyond deadline 30.06.2021. NAA passed no order by 15.01.2022. Proceedings are abated and cannot revive. 10.4 The fresh report submitted in November 2025 is beyond all permissible timelines. Under Rule 129(6), the DGAP must submit its report within six months, extendable by the Authority for a further period of three months only and maximum of nine months. The re-initiated proceedings commenced on 20.03.2024 and the statutory ceiling expired on 20.12.2024. The report submitted in November 2025 is approximately 11 months beyond the ceiling. The CCI lacks competence to grant extensions under Rule 129(6). The GSTAT's extension to 04.12.2025, beyond the nine-month ceiling, is ultra vires Rule 129(6). 10.5 Para 158 of the Delhi High Court judgment holds only that delay in submission of a report in an ongoing investigation does not abate proceedings. It does not authorize a fresh investigation, confer jurisdiction to re-open concluded proceedings, or override the statutory ceiling on extensions. 10.6 The Re....
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....ecific averments not traversed stand admitted. The DGAP's failure to defend the statutory basis of re-initiation, the extensions of time, and its functus officio position renders these objections unrebutted. 12.2 The DGAP's reliance on Paragraph 158 is misplaced, as it deals with delay in a subsisting duty, not revival of a concluded mandate. The fresh investigation commenced years after the original report dated 14.07.2021, without statutory authority. Even directory provisions require reasonable compliance, whereas a delay of over fourteen months beyond the admitted deadline of 20.09.2024 cannot be allowed. The decision in P.T. Rajan supports the Respondent, as it concerns performance of a subsisting duty, not resurrection of a discharged duty. The GSTAT order in A J Enterprises is distinguishable, as it dealt with ongoing investigation, not reopening of concluded proceedings. 12.3 The CCI's suo motu decision to remand all cases, not being a direction of the Delhi High Court, is without statutory sanction under the CGST Act or Rules. The High Court merely recorded an observation and did not direct reopening. The contention that the judgment has universal applicability to no....
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.... i. Whether the re-investigation initiated by the DGAP pursuant to the CCI letter dated 20.03.2024 is void ab initio for want of jurisdiction? ii. Whether the DGAP, having submitted its original report on 14.07.2021, became functus officio, and whether a fresh reference from the Standing Committee under Rule 128 of CGST Rules, 2017 was mandatory before re-investigation? iii. Whether the re-initiated proceedings are barred by limitation under Rule 129(6) of the CGST Rules, 2017, and whether the extension granted by this Tribunal is ultra vires? iv. Whether the Respondent was denied natural justice due to an alleged mid-proceeding change in methodology? v. Whether the Respondent contravened Section 171 of the CGST Act, 2017 by failing to pass on the benefit of additional Input Tax Credit to eligible homebuyers? 15. Issue No. 1: Whether the re-investigation is void ab initio? 15.1 The Respondent submits that paragraph 129 of Reckitt Benckiser India Pvt. Ltd. v. Union of India, (2024) 14 Centax 374 (Delhi), is only an observation regarding the methodology for computation of profiteering and does not constitute a direction for universal r....
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....e to distinguish between the ratio decidendi of a judgment, which constitutes the binding precedent, and the relief granted in the facts and circumstances of the particular case. The relief granted in Reckitt Benckiser (supra) was necessarily confined to the lis before the Hon'ble High Court; however, the legal principle authoritatively laid down therein, insofar as it governs the methodology for determination of profiteering, constitutes the law declared by the jurisdictional High Court and is binding upon this Tribunal. The binding force of the precedent flows from the principle of law which forms the ratio decidendi of the judgment and not merely from the operative directions issued in the particular proceedings. 15.4 The CCI's decision to remit pending real estate matters for re-investigation must therefore be viewed as an attempt to secure uniformity, consistency and conformity with the binding judicial precedent, rather than as an impermissible exercise of suo motu review. The Respondent has also not demonstrated that the impugned re-investigation was undertaken in disregard of any specific statutory prohibition or in excess of a jurisdictional limitation so fundamental as....
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....16.4 The contention that a fresh reference from the Standing Committee was required is without merit. The original reference under Rule 128 remained alive, and the remand under Rule 133(4) did not necessitate a fresh reference. The DGAP was merely directed to correct the methodology and submit a fresh report in the same proceedings. 17. Issue No. 3: Whether the proceedings are barred by limitation? 17.1 Respondent contended that under Rule 129(6), the DGAP must submit its report within six months, extendable by the Authority for a further period of three months only, i.e., a maximum of nine months. The re-initiated proceedings commenced on 20.03.2024, and the statutory ceiling expired on 20.12.2024. The report submitted in November 2025 is approximately 11 months beyond the ceiling. The CCI lacks competence to grant extensions, and the GSTAT's extension to 04.12.2025 is ultra vires Rule 129(6). 17.2 Upon consideration of the mentioned rule and the law laid down in Reckitt Benckiser (supra), this Tribunal finds that Rule 129(6) of the CGST Rules, 2017 provides: "The DGAP shall, within a period of six months from the date of initiation of the investigation, or withi....
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....ance with the binding judicial precedent. 17.6 The proceedings are not barred by limitation. Issue decided against the Respondent. 18. Issue No. 4: Whether there was a violation of natural justice? 18.1 Respondent contended that there was a change of methodology mid-proceeding without hearing, defeating the Respondent's legitimate expectation and violating natural justice. This Tribunal is of considerate view that the change in methodology was not arbitrary but was mandated by the Delhi High Court's judgment in Reckitt Benckiser (supra). The Respondent was given notice of the re-investigation vide Notice dated 10.04.2024 and was afforded an opportunity to submit documents. The DGAP's fresh report dated 20.11.2025 was served upon the Respondent, and this Tribunal issued notice on 14.01.2026 calling for objections. The Respondent filed its written submissions dated 18.05.2026, availing the opportunity to be heard. 18.2 The principles of natural justice require that a party be given a fair opportunity to present its case. In the present case, the Respondent was heard extensively on its jurisdictional and legal objections. The Respondent chose not to address the merits of t....
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.... its re-investigation report dated 20.11.2025, has placed on record uncontroverted material establishing that the input tax credit as a percentage of purchase value available to the Respondent during the pre-GST period (April 2013 to June 2017) was 2.37%, while during the post-GST period (July 2017 to March 2019) it was 8.42%, thereby yielding an additional ITC benefit of 6.05%. The total saleable area being 2,21,255 sq. ft., the per square feet benefit to be passed on to each homebuyer is Rs. 40.33. In respect of the sold area of 69,085 sq. ft., the total profiteered amount is Rs. 27,86,198. The Respondent has not challenged the entitlement of the 66 eligible homebuyers, the total saleable area, the sold area, the per square feet benefit, or the aggregate profiteered amount. 19.5 Based on the above discussion, this Tribunal is of the view that Respondent, M/s Mangalbela Real Estates Pvt. Ltd., has contravened the provisions of Section 171(1) of the Central Goods and Services Tax Act, 2017 by failing to pass on the benefit of additional Input Tax Credit amounting to 31,20,542/- (Rupees Thirty-One Lakh Twenty Thousand Five Hundred Forty-Two only) to the 66 eligible homebuyers in ....