9911796707
TMI Blog2022 (7) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Goods and Service Tax (CGST) Rules, 2017. The brief facts of the case are that a reference was received from the Standing Committee on Anti-profiteering on 09.10.2019 to conduct a detailed investigation in respect of an application filed under Rule 128 of the CGST Rules, 2017 by the Applicant No. 1, alleging profiteering by the Respondent No. 1 in respect of purchase of Flat No. 1404, Tower T-06 in the Respondent's Project "Crescent Bay" situated at Jerbai Wadia Road, near Mahatma Phule Education Society, Bhoiwada Parel Mumbai-400012. The Applicant No. 1 alleged that the Respondent No.1 had not passed on the full benefit of ITC to him by way of commensurate reduction in prices and charged GST @ 12% on the amount due to him against payments. 2. Vide the aforesaid Report dated 29.10.2020 (REPORT), the DGAP had reported that the Applicant No. 1 had submitted the following documents alongwith his application: i. Possession Demand Letter alongwith Demand Note cum invoice, TDS Certificate & Interest Statement. ii Copy of Credit Note of passing on benefit of ITC. iii; Copy of Payment plan. 3. On receipt of the aforesaid reference from the Standing Committee on Anti- profiteer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopers (P) Limited (earlier known as M/s Shree Siddhivinayak Enterprises) in 2012 to develop residential project comprising Six (06) Towers at Parel, Mumbai. This residential project (Crescent Bay) comprised of approximate 1400 residential Bharat Kashyap V5 M/s L & T Parel Project LLP Page 3 of 81 apartments with aggregate saleable area of 28 lakh sq.ft.(approx.). Details as on 30.09.2019 are given in Table- 'A' below: Table-'A' Tower's Name Date of receipt of OC Floors/Units Covered Respondent No. 1 (L&T)'s Component Join Developer Component Total Units Total Area (in sq. ft.) No of Units Area (In.Sq.ft) No of Units Area (In Sq.ft) No of Units Area (In Sq.ft) Tower 1 22.05.17 1 to 39th Floor 179 2,70,085 - - 29 42955 208 3,13,040 15.03.18 40 & 41th Floor 7 10,270 5 8,950 - - 12 19,220 Tower 2 31.10.18 1 to 23rd Floor 130 1,94,750 - - - - 130 1,94,750 12.03.9 23 to 43d Floor 98 1,40,960 12 17,840 - - 110 1,58,800 Tower 3 Under construction - 137 2,16,330 131 1,99,880 - - 268 4,16,210 Tower 4 15.03.2018 1 to 49th Floors 234 3,44,710 8 10,560 24 36600 266 3,91,870 Tower 5 15.03.2018 1 to 54th Floors 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter on a monthly basis for subsequent procurements. The inputs, input services and capital goods were received at various stages of the project which was common for entire project. The Respondent No. 1 submitted that the ITC reversal on account of receipt of the OC would continue till the completion of the project life. vi. ITC reversal of Rs. 4,76,01,568/- pertaining to March 2018 and the said reversal was required to be made in terms of Rule 42 of the Rules on receipt of OC. Since he did not have sufficient ITC balance, they deposited the amount in electronic cash ledger on 18.04.2018. He further stated that he was of the understanding that the said amount would be debited along with return for March 2018. However, due to inadvertent mistake in filling details in Form GSTR-3B for March 2018, the same amount did not get debited. However, on pointing out by the DGAP, he had realized this mistake and debited the electronic cash ledger for an amount of Rs.4,76,01,568/- through Form DRC-03 on 02.06.2020. vii. Regarding the issue of bifurcation of the details of credit availed tower-wise, he submitted that it was not possible to precisely bifurcate the credit details tower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of GST in the following 2 modes:- a. he had passed on benefit of ITC by way of issuance of credit note at the time of raising demand on handing over possession of the flat to customers in GST regime. The details of the credit note were communicated to the customers and reflected in the facility provided to customer viz. the customer login portal. All customers had made payment net of the credit notes issued to pass on the benefit of ITC. The fact of issuance of credit note to customers and customers receiving the amount mentioned in credit note could be verified. b. he had agreed the value for sale of the flat (Initial Agreed Price) before introduction of GST with customers. However, on introduction of GST, he had renegotiated the agreement value (Renegotiated Reduced Price) for flats post GST to pass on the benefit of ITC and to grant certain discounts. The details of price reduction on account of the benefit of ITC were specifically provided in the communication to customers. The benefit of ITC was passed on by reducing the initially agreed price. At the time of renegotiation, the customers had an option to either continue with the booking based on such renegotiated reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to him in order to avoid parallel investigation as DGAP alone was empowered to conduct the investigation into allegation of profiteering based on reference received from the Standing Committee. xiii. Hon'ble Supreme Court of India's order in suo moto Writ Petition (Civil) No. 3/2020, that considering the need to obviate difficulty in respect of cases, had ordered remedial measures for submissions/filings before all the authorities till further order/s to be passed by the Hon'ble Supreme Court. 8. The Respondent No.1 vide the aforementioned letters/e-mails, has submitted the following documents/information to the DGAP:- a. Copies of GSTR-1 Returns for the period July, 2017 to December, 2019. b. Copies of GSTR-3B Returns for the period July, 2017 to December, 2019, c. Copies of Tran-1 Return for transitional credit. d. Copy of Electronic cash ledger from March,2018 e. Copy of GSTR-9 return for the period July, 2017 to March, 2018 f. Copies of VAT & ST-3 returns for the period April, 2016 to June,2017. g. Copies of all demand cum Invoice letters, registered sale agreement and payment details issued in the name of the Applicants. h. Details of applicable tax rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant No. 1 acknowledged and confirmed vide his e-mails dated 12.09.2020. 10. The DGAP has observed that the Respondent No. 1 had entered into a 60:40 revenue sharing Joint Development Agreement with Respondent No. 2 in 2012 to develop the project viz. "Crescent Bay" comprising 1482 flats. Since, the Respondent No. 1 didn't have details of home buyers and status of sold and unsold units as on 30.09.2019 pertaining to 62 units out of 1482, which were allotted to M/s Omkar Realtors & Developers Pvt. Ltd. (Landowners) as Investor's Component by him, therefore, the DGAP had decided to implead M/s Omkar Realtors & Developers Pvt. Ltd. (Landowners) as the Respondent No. 2 in the ongoing proceedings and accordingly a letter was issued to the Respondent No. 2 on 17.08.2020, calling upon him to submit the information/ documents required to investigate the matter. 11. Therefore, in response to the above said letter dated 17.08.2020 and subsequent reminders of the DGAP, the Respondent No. 2 had submitted his replies vide letters/e-mails dated 26.08.2020, 09.09.2020, 14.09.2020 and 20.09.2020, inter alia submitted that: a. He had undertaken Slum-Rehabilitation Project under Rule 33 (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant No. 1. Hence, no complain of profiteering was lying against him. e. He had submitted that the anti-profiteering provisions were applicable only in following cases: i. Reduction in tax rate on supply of goods or services; or ii. Additional benefit of ITC received. There had been no reduction in Tax rate of sale of under construction flats from Service Tax regime to GST regime. He had charged tax at applicable rates on 62 flats sold by him and duly deposited the same with the government. f. As he had not incurred any cost for construction of saleable flats (inputs, input services and capital goods), no additional benefit had accrued to him in form of ITC. Therefore, he requested to drop his name as Respondent No. 2 in respect of "Crescent Bay" Project and also drop the anti-profiteering proceedings initiated against him. 12. Vide the aforementioned letters and e-mails, the Respondent No. 2 submitted the following documents/information to the DGAP:- a. Copies of GSTR-1 returns for the period July, 2017 to Sept., 2019. b. Copies of GSTR-3B returns for the period July, 2017 to Sept., 2019. c. Electronic Credit Leger for the period July, 2017 to Sept., 2019. d. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,59,338 1,17,148 0 0 32,76,486 5 On completion of 5th podium floor slab 31.07.2015 5.00% 31,59,338 1,32,692 0 0 32,92,030 6 On completion of 2nd floor slab 25.03.2016 5.50% 34,75,271 1,51,174 0 0 36,26,445 7 On completion of 7th floor slab 19.06.2016 5.50% 34,75,271 1,56,387 0 0 36,31,658 8 On completion of 12th floor slab 16.09.2016 5.50% 34,75,271 1,56,387 0 0 36,31,658 9 On completion of 18th floor slab 18.11.2016 5.50% 34,75,271 1,56,387 0 0 36,31,658 10 On completion of 24th floor slab 21.02.2017 5.50% 34,75,271 1,56,387 0 0 36,31,658 11 On completion of 30th floor slab 04.04.2017 5.50% 34,75,271 1,56,387 0 0 36,31,658 12 On completion of 35th floor slab 02.05.2017 5.50% 34,75,271 1,56,387 0 0 36,31,658 13 On completion of 40th floor slab 27.05.2017 5.50% 34,75,271 1,56,387 0 0 36,31,658 14 On completion of 45th floor slab 22.06.2017 5.50% 34,75,271 1,56,387 0 0 36,31,658 15 On completion of 50th floor slab 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ENVAT/Input tax Register for the period April 2016 to September 2019 reconciling with ST-3 and GSTR-3B returns". However, the Respondent No. 1 had neither submitted the CENVAT Credit Rules, 2004 nor the CGST Act provided for maintenance of credit register tower-wise. The Respondent No. 1 had undertaken construction of 6 towers for sale to customers. While the construction costs were identified by the Respondent No. 1 separately for each tower and costs which were common to all towers was apportioned to the towers on a reasonable basis, no such bifurcation was readily kept or available of the CENVAT credit / ITC. The SAP system of the Respondent No. 1 also did not provide a tower-wise credit report which tallied exactly with the ST-3/GSTR-3B Returns. Accordingly, the data available at registration level had been submitted. Since, the Respondent No. | had not maintained any separate books of accounts for each registration for booking of tower-wise CENVAT/ITC hence it was not possible to precisely bifurcate the credit details tower-wise as the details had been submitted at entity level. 16. Further, the relevant point in this regard that as per para 5 of Schedule-IIT of the CGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details of such benefit claimed to have been passed on along with documentary evidences, were submitted by the Respondent No. 1 to the DGAP. It was seen from the Credit Note dated 19.06.2019 that an amount of Rs. 1,29,360/- (inclusive of the GST) had been given to the Applicant No. 1 on 0 account of discount arising out of ITC. However, the correctness of the amount of benefit so passed on by the Respondent No. 1, had to be determined in terms of Rule 129(6) of the Rules. Therefore, the ITC available to the Respondent No. 1 and the taxable amount received by him from the Applicant No. 1 and other recipients post implementation of GST, had to be taken into account for determining the benefit of ITC required to be passed on. 18. The Respondent No. 1 was eligible to avail CENVAT credit of Service Tax paid on services but no credit was available in respect of Central.0 Excise duty and VAT paid on the inputs before GST was introduced whereas in the post GST period, the Respondent No. 1 could avail ITC of GST paid on all the inputs and the input services including the sub-contracts. From the information submitted by the Respondent No. 1 & 2 for the period April, 2016 to September, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early confirmed that post-GST, the Respondent No. 1 had benefited from additional ITC to the tune of 10.51% [12.00% (-) 1.49%] of the turnover. Accordingly, the profiteering had been examined by comparing the applicable tax rate and ITC available in the pre-GST period (April, 2016 to June,2017) when Service Tax @ 4.50% and VAT @ 1% were payable (total tax rate of 5.50%) with the post-GST period (July, 2017 to September, 2019) when the effective GST rate was 12%(GST @18% along with 1/3rd abatement for land value) on construction service, vide Notification No. 11/2017-CentralTax (Rate), dated 28.06.2017. Accordingly, on the basis the figures contained in table-'E' above, the comparative figures of the ratio of ITC availed/available to the turnover in the pre-GST and post-GST periods as well as the turnover, the recalibrated base price and the excess realization (profiteering) during the post-GST period, was tabulated in Table-'F' below. Table-F S.No. Particular Post-GST 1 Period A After 01.07.2017 2 Output GST Rate(%) B 12:00 3 Ratio of CENVAT credit/ITC to Total Turnover as per table-'E' above (%) C 12:00 4 Increase in ITC availed post-GST (%) D=12.00%less1.49% 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding GST @ 12% on the base amount of Rs.1,10,13,787/-) which was required to be passed on by the Respondent No. 1 to the Respondent No. 2 for 62 units who in turn was required to passed on the same to his customers. The buyers and unit no. wise break-up of this amount of Rs.1,23,35,442/- was given in Annexure-37 of the Report. This amount did not include profiteering amount pertaining to the Applicant No. 1 as the Respondent No. 2 had not raised or collected any demand from the Applicant No. 1 during the period July, 2017 to September, 2019. 22. The DGAP on conclusion, has submitted that the above computation of profiteering was with respect to 851 home buyers (16,16,060 sq. feet) from whom consideration had been received by the Respondent No. 1 during the period 01.07.2017 to 30.09.2019 (excluding the flats sold post 01.07.2017) as the Respondent No. 1 had booked 1137 flats till 30.09.2019, out of which 50 flats sold post receipt of OC on which GST was exempt. Further, the Respondent No. 1 had claimed that effective from 01.07.2017, he had sold 41 flats at the rates agreed by the customers after adjusting benefit of reduction in rate of tax or benefit of ITC and the price so fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; (Amount in Rs.) S.No. Category of Customers No.of Units Area (in Sq ft) Amount Raised/Received (Post GST) Benefit to be passed on as per Annex-36 & 37 of the Report Benefit Passed on by the respondent (Excess)/Short age of Benefit (profiteering) Remark A B C D E F G H=F-G I 1 Applicant No.1 1 2,750 67,50,109 7,94,569 1,29,360 6,65,209 Further Benefit to be passed on as per Annex-38 2 Buyers other than Applicant No. 1 849 16,11,520 2,50,16,95,185 29,44,79,543 7,39,68,937 22,05,10,606 Further Benefit to be passed on as per Annex-38 3 1 1,750 4,10,848 48,362 2,66,418 (2,18,057 Excess Benefit passed on. List Attached as Annex-39 4 16 28,920 0 0 62,19,153 (62,19,153) No Consideration Paid, However,Benefit passed on as per Annex-39 5 179 270085 0 0 0 0 No Consideration Paid and No Benefit passed on. 6 41 63,520 78,60,91,686 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in Sr. No. 1 of table-'G' and Para-23 supra. Further, the investigation revealed that the Respondent No. 1 was required to pass on the additional benefit of ITC amounting to Rs. 22,05,10,606/- as mentioned at Sr. No. 2 of Table- 'G' and in para-23 supra, to 849 other recipients (who had entered into agreements with the Respondent No. 1 upto 30.06.2017) who were not Applicants in the present proceedings. These recipients were identifiable as per the documents provided by the Respondent No. 1, giving the names and addresses alongwith Unit No. allotted to such recipients. Therefore, this additional amount of Rs. 22,05,10,606/- was required to be returned to such eligible recipients. Further, the Respondent No. 2 also was required to pass on the benefit of ITC amounting to Rs. 1,23,35,442/- as mentioned at Sr. No. 9 of Table- 'G' and in para-25 supra, in respect of 30 other recipients who were not Applicants in the present proceedings. These recipients were identifiable as per the documents provided by the Respondent No. 2, giving the names and addresses along with Unit No. allotted to such recipients. Therefore, this amount of Rs. 1,23,35,442/- (other than Respondent No. 1's prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in rate of tax on supply of goods / services nor benefit of ITC had been defined in the CGST Act. Hence, a reduction in rate of tax on supply of goods / services would mean a reduction in the rate of tax on goods /services supplied by a registered person. The Respondent No. 1 was admittedly a construction service provider and supplied construction services on which there was no reduction in rate of tax. b. The phrase benefit of ITC had not been defined, the definition of ITC was contained in section 2(63) of the CGST Act, which was extracted for ready reference: (63) "input tax credit" means the credit of input tax; Input tax was defined in section 2(62): (62) "input tax" in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes- (a) the integrated goods and services tax charged on import of goods; (b) the tax payable under the provisions of sub-sections (3) and (4) of section 9; (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act; (d) the tax payable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The entire proceedings was beyond jurisdiction and the scope of Section 171 of the CGST Act and the DGAP's Report was liable to be set aside based on this ground alone. f. Section 171 was inapplicable in the present facts. Section 171 applied only when there was a one-to-one identification between procurement of goods/services and his supplies. In the present case, since the same was not possible, the provisions of section 171 were inapplicable. II. The Report could not go beyond the application submitted by the Applicant No. 1:- a. The Report of the DGAP had gone beyond the application submitted by the Applicant No. 1 and was liable to be rejected on this ground alone. b. On perusal of the provisions made under Section 171 of the CGST Act 2017 and Rule 128, for anti-profiteering; it could be concluded that an anti-profiteering investigation could be initiated only on receipt of written application from interested party, Commissioner or any other person. In the instant case, the proceedings were started with the application received from the Applicant No. 1. It was pertinent to mention that the said application was by Shri Bharat Kashyap. Hence, the investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t buyers and recipients who had not filed any application without any reference from this Authority in this regard. e. An application filed by a dissatisfied applicant might be compared to a show cause notice for a tax proceeding wherein the assessee was required to show cause as to why tax, interest, penalty, etc. should not ( be levied and collected from him. It was settled principle of law that an order adjudicating a show cause notice could not travel beyond the scope of a show cause notice. In this regard reliance was placed on the case of Toyo Engineering India Limited vs. CC, Mumbai reported at 2006 (201) E.L.T. 513 (S.C.) wherein the Hon'ble Supreme Court held that the department could not travel beyond the show cause notice. The extract of the relevant portion of the judgment was provided below for quick reference: "16. Learned counsel for the Revenue tried to raise some of the submissions which were not allowed to be raised by the Tribunal before us, as well. We agree with the Tribunal that the revenue could not be allowed to raise these submissions for the first time in the second appeal before the Tribunal. Neither adjudicating authority nor the appellate authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion - 1 and Information - 2 filed by the Informants, only allege contravention of Section 3(4) read with Section 3(1) of the Act. No allegations of abuse of dominance have been put forth by the Informants. ...45. Accordingly, the Commission is of the view that the DG's investigation of contravention of Section 4 of the Act by the OP, being dehors the directions given to the DGAP, is ultra vires the scope of investigation deserves to be disregarded." (Emphasis Supplied) g. The Rule 133 of CGST Rules 2017 as amended vide Notification No. 31/2019-Central Tax, dated 28.06.2019 by way of insertion of sub- rule (5), which provided that if the Authority had reasons to believe that there had been contravention of the provisions of Section 171 in respect of goods or services or both other than those covered in the DGAP report, it might, for reasons to be recorded in writing, direct the DGAP to cause investigation or inquiry with regard to such other goods or services or both. In the instant case, no such reference had been made by the Authority to cause any investigation in respect of profiteering vis-a-vis customers, other than the Applicant No. 1. Therefore, the report should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 1 requested for a short time of 3 weeks to submit the information. Further, vide email dated (25.10.2020, the Respondent No. 1 sought a short time of 10 days. After putting in tremendous efforts, the Respondent No. 1 vide his submissions dated 30.10.2020 furnished the information of CENVAT Credit and ITC attributable to Tower 6. However, the DGAP had by then already issued his Report dated 29.10.2020 without considering the Respondent No. 1's submissions dated 30.10.2020. The data was submitted within the time requested by him. c. The details of construction cost was available separately tower-wise and the same were submitted to RERA authorities from time to time. Therefore, to say that the data was not available separately for each tower was incorrect. Since GST registration was single, ITC data was not readily available tower-wise but the same could be bifurcated, as had been done by the respondent in the present case and the details submitted vide email dated 30.10.2020. Therefore, the computation of alleged profiteering need to be done for Tower 6, and the details prepared tower-wise could not be disregarded. d. The Authority to remand the matter back to the DGAP to cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing of orders effecting reduction in prices. f. Vide CGST Act or Rules made thereunder, there was no indication, let alone description as to how to conclude that there was profiteering due to reduction in rate of tax or benefit of input tax credit. Whether such computation had to be done customer-wise, RERA project-wise or entity-wise, etc. Further, there was no indication in section 171 of the CGST Act as to his applicability in respect of transactions from pre-GST to GST regime. Rules did not throw any clarity on this issue as well. In the absence of the same, there was lack of transparency and the results could vary from case to case resulting in arbitrariness and violation of Article 14 of the Constitution of India. In other words, it would be impossible for him to defend his case and explain how the observations and findings of the DGAP was incorrect, thus, violating \V the principles of natural justice. Absence of such mechanism or framework within which the Authority) DGAP must discharge his duties, would also lead to arbitrariness. g. The practice adopted by other countries where GST is/was in place. In order to control rise in inflation on account of implementation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ultra vires as there was no statutory mechanism to ascertain value of service component of subject levy. i. The Authority was itself using different methodology to ascertain 'profiteering' in the cases before it. In some cases, the Authority had restricted itself to the goods mentioned in the application, while in some it had considered business as a whole. In the facts of the case, analysis had been done for all RERA projects combined whereas in other cases, analysis was done only for the RERA project of the homebuyer who filed the application. This showed that there was no defined procedure being adopted by the Authority leading to arbitrariness. Further, the CGST Act and CGST Rules themselves had acknowledged challenges in making applicable certain provisions consistently across sectors, and special rules had been provided for applying on specific sectors. These include reversal of ITC required to be made by a banking company or a financial institution including a non-banking financial company in terms of section 17(4) of the CGST Act, determination of value of taxable supply for supply of money changing service, life insurance business, etc. in terms of rule 32 of the CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lculation of alleged profiteering based on the comparison of ratio of ITC to turnover for pre-GST period and GST period would lead to incorrect results and hence the method adopted by DGAP was liable to be set aside. b. The method would result in incorrect computation of benefit for the following reasons/ assumptions - * Construction Project Life cycle effect had been ignored and it had been assumed that uniform expenses was incurred throughout the lifecycle of the project. In other words, this methodology assumed that uniform expenses was incurred throughout the project lifecycle and Y that turnover would also be uniform, which practically varies a lot given the market conditions and was objectively, an incorrect assumption to make. * The turnover would. vary as per the market conditions and it was difficult to maintain the ratio of the same in proportion to procurement in a real estate sector. For example, turnover would be less in lean period while credit would still be higher due to continuous use of inputs/input services for construction; * ITC was an absolute number which would vary as per the Govt. rate policies. A lot of goods had been moved from 28% to 18% slab. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 100 110 10 16.36% 3 12% 100 12 100 110 10 10.90% In view of the above, difference in rate of GST was leading to change in ITC to turnover ratio, which would change the benefit of ITC. However, it was submitted that the rate of GST does not determine the actual benefit. Rather, the duties / taxes and rates in pre-GST regime which were non-creditable but had become creditable in the GST regime alone determine the benefit. The benefit need to be computed based on the tax rates prevailing in pre-GST regime, and the rate of GST charged by suppliers was irrelevant for determination of benefit derived by the Respondent No. 1. d. The additional ITC in his hands in terms of Section 171 of the CGST Act should reflect such ITC on goods or services which was not available earlier with him. However, the approach adopted by the DGAP for calculating the additional benefit accrued to him was based on the change in rate of tax on input goods and services in the GST regime itself. It was pertinent to mention that credit with respect to such inputs/input services was available to the Respondent No. 1 earlier as well before the change in the rate. Further, the DGAP had not considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the very same period reduced by 49.75 % only ([145.66-73.18] / 145.66 * 100). f. Comparing the pre-GST credit to turnover ratio to the post-GST ratio would therefore never yield the correct outcome of benefit of credit. It was therefore submitted that the method adopted by the DGAP was wholly incorrect, without any logic. The Report of the DGAP was therefore liable to be set aside on this ground alone. ITC reversal on account of receipt of OC not considered: g. The DGAP in his report had considered ITC of Rs. 66,75,82,817/- for period July, 2017 to September, 2019 which was before considering the reversal of ITC made by the respondent in terms of rule 42 and 43 of the CGST Rules, on account of sale of flats post receipt of occupancy certificate. He had already reversed an amount of Rs. 9.67 cr. during the period July, 2017 to September, 2019 which had not been considered by the DGAP. In fact, the DGAP had added back this reversal to the ITC availed as per Form GSTR-3B in order to calculate the credit to turnover ratio. The Respondent No. 1 submitted that the ITC reversed could not be considered for the purpose of determining the benefit of ITC and accordingly, ITC rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In case of supply of service specified in column (3), in item (i); (i) (ia), (ib), (ic), (id), (ie) and (if) against serial number 3 of the Table above, involving transfer of land or undivided share of land, as the case maybe, the value of such supply shall be equivalent to the total amount charged for such supply less the value of transfer of land or undivided share of land, as the case may be, and the value of such transfer of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply." Emphasis supplied b. Further, Section 171(2) of the CGST Act empowered the Central Government to constitute an Authority / empower an existing Authority to inter alia examine whether input tax credits availed by a registered person had actually resulted in a commensurate reduction in \ the price of the goods or services or both supplied by him. Benefit of ITC needed to be passed on by way of reduction in the price of services only. It was an admitted position that 1/3rd of the total amount charged was towards land and not towards the services provided by the Respondent No. 1. Accordingly, it was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the total profiteering determined in the DGAP report on account of land value. The calculation of same was as follows:- # Particulars Amount (in INR) / percentage A Base price raised during July 2017 to September 2019 (Flats sold upto 30.06.2017) (before considering benefit of ITC passed on)) 2,50,88,56,141 B Value of Land (1/3rd) 83,62,85,380 C Benefit of ITC% computed by Ld. DG 10.51% D Amount of profiteering computed by the DGAP on the value of land [B*C] 8,78,93,593 VII. Renegotiations on or after 01.07.2017 to be excluded from analysis of profiteering. Renegotiation resulted in novation of the contract mutually agreed by the parties; a. He had submitted to the DGAP a list of 108 customers in respect of whom the prices were renegotiated after 30.06.2017 and therefore requested exclusion of these customers from the ambit of profiteering analysis being carried out by the DGAP. In respect of these flats, he had arrived at a revised agreement price after taking into account various factors including benefit of ITC, and the said revised agreement price was offered to customers. The customers were also given an option to cancel the booking in case he would not li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding benefit of ITC, if any, u/s 171 of the CGST Act and the same shall be outside the scope of calculation to be done the DGAP. In this regard, reference could be drawn to the Order of the Authority in the case of Smt. Shubhra Vipin Gajbhiye and Anr. vs. M/s Pyramid Arcades Pvt. Ltd. [2020-VIL-04-NAA] wherein it was held that the turnover from the units booked in the pre-GST period alone was to be taken into consideration and units booked after implementation of GST should be excluded from the scope of applicability of section 171. The principle behind the same was that units booked after implementation of GST had already factored in the benefit and therefore no benefit was required to be passed on. He submitted that the same was applicable in the present case as well, where the renegotiated reduced prices had been agreed after implementation of GST. Therefore, these flats needed to be excluded from the ambit of profiteering analysis. The relevant extract of order passed by this Authority in the above case was provided as follows: "11.... The DGAP has further reported that the Respondent was required to pass on the benefit of the additional ITC to his unit buyers who had boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the amount of Rs. 1,55,617/- profiteering computed in respect of such customer be excluded from the total profiteering alleged by the DGAP. IX. The profiteering amount had been incorrectly inflated in the Report by adding GST and the same was not sustainable; a. The profiteered alleged by the DGAP was arrived at by comparing the amount collected / raised by him (Respondent No. 1) from his customers including GST @ 12%, with the recalibrated prices / commensurate base price including GST. For instance, if he had charged Rs. 100 + 12% GST thereon (thus totaling to Rs. 112 incl. GST), but as per the DGAP, he should have charged Rs. 90 + 12% GST thereon (thus totaling to Rs. 100.8), the profiteering had been computed as difference of Rs. 112 and 100.8, i.e. Rs. 11.2. In effect, it was the DGAP's contention that the Respondent No. 1 had profiteered to the extent of 12% GST collected on so called increased base price (i.e. Rs. 10 and 12% GST on top of it = Rs. 11.2 profiteering). Further, while arriving at the total alleged profiteering amount, the DGAP had incorrectly inflated the profiteering amount by adding 12% GST to the base price demanded by Respondent No. 1 and comparing it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The setting colours the sense of the word. The spirit of the provision lends force to the construction that 'collected' means "collected and kept as his" by the trader. If the dealer merely gathered the sum by way of tax and kept it in suspense account because of dispute about taxability or is ready to return if eventually it is not taxable, it is not collected. 'Collected., in an Australian Customs Tariff Act, is held by Griffth C.J, not to include money deposited under an NX agreement that if it is not legally payable it would be returned! (Words & Phrases p. 274). We therefore, semanticise. Collected' not to cover amounts gathered tentatively to be given back if found non-eligible from the dealer." c. Since the amount collected as GST by him (the Respondent No. 1) from the recipient on the alleged profiteering amount had already been deposited with Government and there was no factual dispute by the DGAP on this aspect, he submitted that addition of 12% GST to calculate the alleged profiteering amount was incorrect, not sustainable and liable to be rejected and an amount of Rs. 2,36,97,409/- (22,11,75,815* 12/112) should be reduced from the total profiteering alleged by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of eighteen per cent. from the date of collection of the higher amount till the date of deposit of such amount] in the Fund constituted under section 57 and the remaining fifty per cent. of the amount in the Fund constituted under section 57 of the GST Act, 2017 of the concerned State, where the eligible person did not claim return of the amount or was not identifiable, (iv). imposition of penalty as specified under the CGST Act; and (v). Cancellation of registration under the CGST Act. Hence, based on the aforementioned powers of the Authority, it could be said that the Authority's order could give any/all above directions to the person who had been held as having violated Section 171. He further submitted that the order required to be passed by the Authority under Section 171 would determine rights and liabilities of the said registered person with civil and/ penal consequences. c. The first principle of natural justice viz., audi alteram partem required that the person concerned should be heard. In other words, nobody : should be condemned unheard. One of the essential elements of hearing was communication of the grounds based on which action was proposed to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity being granted to the assessee to put forth his case, then principles of natural justice had to be read in the statute. The Court held: "5. and if the statute is silent, then, principles of natural justice had to be read into the statute, so that the assessee have reasonable opportunity to put forth his case." He further relied upon the case of Dharampal Satyapal Ltd. v. Dy. Commissioner of C.Ex reported at 2015 (320) ELT 3 (SC), where the Hon'ble Supreme Court observed that applicability of principles of natural justice was not dependent on any statutory provision and that the principle had to be mandatorily applied irrespective of the fact as to whether there was any such statutory provision or not. In the case of Union of India v. Hanil Era Textiles Ltd., reported at 2017 (349) ELT 384 (SC), Hon'ble Supreme Court held that no order could be passed against a person without issuing a show cause notice to him. In the words of the Court: "....no order could be passed against a person without issuing a show cause notice to him/it. This would be in violation of the principles of natural justice and also infringe Article 14 of the Constitution of India. Audi Alteram Partem, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CGST Act and Rules made thereunder pertaining to anti-profiteering was unconstitutional being violative of Article 14 and Article 19(1)(g) of Constitution of India. (c). Rules 126, 127 and 133 of the CGST Rules suffer from the vice of excessive delegation. (d). Non-prescription of any methodology or guidelines renders the investigation report unsustainable. On the basis of the aforementioned submissions it was submitted that the proceedings being violative of principles of natural justice was liable to be dropped in entirety. 30. Vide his written submissions dated 19.01.2021, the Respondent No. 2 has made objections which were already raised by the Respondent No.1 mentioned at para 29(1), (II), (IV), (VD, (IX) to (XT) and apart of these, he had inter alia stated; (1) The procedure followed not in accordance with Rule 128 & 129 of the CGST Rules 2017:- (a) The complaint was filed by the Applicant No.1 against Respondent No. 1 in respect of sale of flat by Respondent No.1 to him and he (Respondent No. 2) had neither raised nor collected any demand from Applicant No. 1 in pre or post GST period. Further, the Standing Committee had not examined any evidence pertaining to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2. Comparison of ratio of credit to turnover for pre-GST period and GST period was not the correct mechanism for calculation of profiteering amount: * No. benefit has accrued to the Respondent No. 2:- (a). The DGAP had _ in Para 20 of his report stated that the Respondent No. 2 was eligible to avail CENVAT credit of service tax paid on services but no credit was available in respect of Central Excise Duty and VAT paid on the inputs. Post-GST, the Respondent No. 1 could avail ITC of GST paid on all the inputs and input services including sub- contract. The DGAP had accordingly computed the credit to turnover ratio pre-GST and post-GST (by including his turnover and area) and computed the benefit required to be passed on. It was submitted that the DGAP had failed to understand that Respondent No. 1 and 2 were two separate legal entities and the allegation of profiteering, if any, needed to be examined qua each entity separately. The figures of two separate legal entities could not be artificially combined to calculate profiteering. (b). While the Respondent No. | might not had been eligible to avail credit of excise duty and VAT paid on inputs, the same was not true as reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id ratio was not appropriate for the reason that under the real estate sector, there was no correlation between turnover and the cost of construction or development of a project. The turnover reflects the amount collected by developer as per payment or booking plans issued by it which was purely based on market driven strategy. On the contrary, the ITC was accrued to a developer on the basis of actual cost incurred by it while undertaking the development of a project. Accrual of ITC was not dependent on the amount collected from the buyers. In this industry, there might be cases where advance was received by the suppliers/dealers even before the commencement of the projects. Likewise, units might be sold after the completion of the project as well. Thus, receiving of inputs/input services and taking credit of the same did not have any immediate/direct relation with the turnover in real estate sector. Accordingly, calculating profiteering on the basis of turnover could not reflect the correct outcome of benefit of credit to him. (iii). He was entitled to CENVAT credit / ITC of the Service Tax + KKC and GST respectively. He had not incurred any cost but was only paying the taxes cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it accrued to the him is incorrect. (III). Even if computation method was correct, it should be applied to each legal entity separately. If the same was done, no profiteering could be established Qua the Respondent no. 2 as the difference of credit to turnover ratio was negative:- (a). If the approach adopted by the DGAP of comparing credit to turnover ratio was assumed to be correct, the said ratio should be calculated separately for each entity, viz. the Respondent No. 1 and 2, based on the credit and turnover details of each of the entities separately. (b). He and the Respondent No. 1 were separate legal entities as section 171(2) of the CGST Act provides that; "(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate had actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him." In view of the above, the Central Govt. was to constitute / empower an Authority to examined whether the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein the DGAP has inter alia Submitted that, (a). Objection raised by the Respondents No. 1 at para 29 (I):- The methodology adopted by the DGAP was correct and strictly as per law enshrined in Section 171 of the CGST Act. The methodology had been consistently adopted by the DGAP and upheld by the Authority 'n all similar cases. In order to quantify the benefit of ITC, it was necessary to quantify the credits available to the Respondent No. 1 in the pre-GST regime and also the credits available in the GST regime. Further, the Respondent No. 1 discharged his output GST liability by utilizing the ITC available to him in addition to the credit which was not available to him in pre-GST period. However, the Respondent No. 1 collected or charged full GST from the customers or flat buyers. Therefore, Respondent No. 1 was not required to pay anything from his own pocket to pass on the benefit of additional ITC accrued to him in GST period. Hence, the methodology adopted by the DGAP was correct and justifiable. Further, in the Report dated 29.10.2020, the increase in ITC as a percentage of total taxable turnover availed by the Respondent No. 1 post-GST had been quantified. The input or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had already been passed on by the above company. Hence, there was no ground to investigate the other models of the Cars. However, in the present case it was found that the Respondent No. 1 had not passed on the benefit to the Applicant No. land hence there was sufficient Ni ground for the DGAP to investigate the passing on the benefit to other flat buyers also. Similarly, the Respondent No. 1 cited the case of Shri Rishi Gupta vs. M/s Flipkart Internet Pvt. Ltd. 2018 VIL-04-NAA. In this case, the company was not the supplier of the Almirah and hence he had not violated the provisions of Section 171(1) of the CGST Act, 2017 and hence, there was no ground to investigate him in respect of other products as he was not a supplier. However, during the course of proceedings it was found that M/s. Flipkart had not refunded the extra GST to the buyers which was ordered to be refunded and it was accordingly refunded. Therefore, the above case did not help the cause of the Respondent No. 1. (c). Objection raised by the Respondents No. 1 at para 29 (IV):- The "Methodology and Procedure" had been notified by the Authority vide his Notification dated 28.03.2018 under Rule 126 of the CGST Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the powers and functions of the DGAP, on the recommendation of the GST Council, which was a Constitutional federal body created under the 101° Amendment of the Constitution, as per Rule 127 and 133 of the CGST Rules, 2017. Further, the power to determine his own Methodology & Procedure had been delegated to the Authority (hereinafter referred as "Authority') under Rule 126 of the above Rules as per the provisions of Section 164 of the above Act as such power was generally and widely available to all the judicial, quasi-judicial and statutory authorities to carry out his functions and duties and hence no special favour had been shown to the Authority while granting such power. The Authority had only been allowed to 'determine' the methodology and not to 'prescribe it' which it had to do keeping in view the facts of individual case. Since the functions and powers to be exercised by this Authority had been approved by competent bodies, the same was legal and binding on the Respondent No. 1. In light of above facts, quantum of profiteering was determined by the DGAP by taking into account the particular facts of each case. Hence, there could not be one-size-fits-all mathematica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No. 1 of M/s. Bhartiya City Developers Pvt. Ltd. was different from the facts in the present case as in case of M/s Bhartiya City Developers Pvt. Ltd., the Company had entered into two separate Agreements, namely Agreement to sell and Agreement for construction, wherein the Company charge GST @ 18% on Agreement for construction without any abatement. Since, the consideration was received as per Agreement to sell (towards Land) which was altogether separate from the Agreement for construction and did not levy GST, so no benefit was computed towards the value of Land. However, in the present case, there was a common agreement entered with the customers agreeing to the total price without bifurcation of amounts between Land and Construction. Further, the DGAP in his Report dated 29.10.2020 had considered GST @ 12% (after abatement for Land) which was mentioned in para-21 of the Report. Further, the case of M/s. Fusion Buildtech Pvt. Ltd. cited by the Respondent No. 1 did not support his contention, as in Fusion case, the DGAP had computed the benefit of ITC not passed on i.e. the profiteering amount considering the total consideration raised/collected from the Applicant No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyers i.e. to either accept whatever ITC benefit that was being passed on or to cancel his booking. As it was evident from the Respondent No. 1's said submission dated 19.01.2021, that 42 customers out of 150 had to cancel his bookings and remaining 108 customers were forced to accept the proposal which did not pass on the appropriate benefit of ITC to them. Therefore, Respondent No. 1 was statutorily bound to pass on the due benefit to the buyers and cannot deprive these customers from the eligible benefit. The DGAP in his Report dated 29.10.2020 had computed the profiteering amount for these customers and duly considered the benefit passed on by the Respondent No. 1. (g). Objection raised by the Respondents No. 1 at para 29 (VIII):- As Stated in para-5 of the Report dated 29.10.2020, the investigation covered the period from 01.07.2017 to 30.09.2019 and any transaction executed post 30.09.2019 was outside the scope of present investigation. (h). Objection raised by the Respondents No. 1 at para 29 (IX):- Section 171 of the CGST Act, 2017 read with Chapter XV of the Rules, required the supplier of goods or services to pass on the benefit of the tax rate reduction or ITC to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been already accorded 03 (three) opportunities on 19.11.2020, 28.12.2020, 19.01.2021 for submitting reply. Thus, principles of natural justice were being followed in letter and spirit. DGAP has further stated that the Hon'ble Supreme Court in the case of SEBI v. Akshya Infrastructure (P) Ltd., (2014) 11 SCC 112 had held that "It is by now settled proposition of law that mere breach of rules of natural justice is not sufficient. Such breach of rules of natural justice must also entail avoidable prejudice to the respondent. " In the light of the above, DGAP has submitted that there was no violation of principle of natural justice or any prejudice had been caused to the Respondent No. 1. (j). Objection raised by the Respondents No. 2 at para 30 (I):- In this regard, DGAP had observed from the Sale Agreement entered with the Applicant No. | that the Respondent No. 2 was a party and signed the said agreement. Therefore, the Agreement was a Tripartite where Respondent No. 2 was a necessary party and thus, participation of the Respondent No. 2 in the said transactions was undeniable. Further, in the impugned project, the CENVAT/ITC on the purchase of inputs, input services and capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this amount is given in Annex-36. This amount is inclusive of Rs. 7,94,569/- (including GST on the base profiteered amount of Rs. /,09,436/-) which is the benefit of ITC required to be passed on to the Applicant, mentioned at serial no. 948 of Annex-36. Similarly, the above profiteering amount included an amount of Rs 1,23,35,442/- (including GST @12% on the base amount of Rs. 1,10,13,787/-) which is required to be passed on by the respondent to the Respondent No. 2 for 62 units who in turn is required to passed on the same to his customers. The buyers and unit no. wise break-up of this amount of Rs. 1,23,35,442/- is given in Annex-37. This amount does not include profiteering amount pertaining to the Applicant as the Respondent No. 2 has not raised or collected any demand from the Applicant during the period July, 2017 to September, 2019." 32. The above said clarifications dated 11.02.2021 of the DGAP, have been supplied to the Respondent No. 1 and 2 as well as the Applicant No.1 for their consolidated submissions on it. Accordingly the Respondent No.1 and 2 vide letters dated 09.03.2021 have submitted their replies on the above said clarifications of the DGAP wherein they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ats by 10.51% due to the additional benefit of ITC and by charging GST at the increased rate of 12% on the pre-GST basic prices, hence, they have contravened the provisions of Section 171 of the CGST Act, 2017 and Rules made thereunder. The DGAP had concluded that the benefit of Rs. 30,76,57,916/- (including GST@ 12%) comprising Rs. 29,53,22,474/- and Rs. 1,23,35,442/- to 851 home buyers and the Respondent No. 2 respectively was to be passed on by the Respondent No. 1 for the period from 01.07.2017 to 31.03.2019. The DGAP had also noticed that the Respondent No. 1 had passed on the ITC benefit of Rs. 7,41,46,659/- to 851 home buyers including Applicant No. 1 as out of 1420 flats which were available with the Respondent No. 1 for sale during the period from 01.07.2017 to 31.03.2019, 195 flats had booked in pre-GST period and no consideration received in post GST period, 50 flats were booked after Completion Certificate, 41 had sold on negotiated price after adjustment of ITC benefit, on 01 flat required ITC benefit was passed on and 283 were unsold as on 30.09.2019. Therefore the benefit of Rs. 22,11,75,815/- (including GST) is required to be passed on to 750 home buyers for the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law and the methodology adopted by the DGAP is arbitrary and without any foundation. b. There has been denial of principle of natural justice inasmuch as no show cause notices have been issued during the proceedings, c. Proceedings are time-barred in terms of rule 133 of the CGST Rule, 2017. d. Improper Constitution of authority in absence of the judicial member e. Section 171 of the CGST Act 2017 and the rules made thereunder are unconstitutional being violative of Article 14 and 19 (1) (g) of the Constitution of India. f. Rules 126, 127 and 133 of the CGST Rules 2017 suffer from the vice of excessive delegation. g. Not restricting investigation in respect of Applicant only. h. Reversal of credit. i. Exclusion of value of land. j. Renegotiation of agreement. 39. The Respondents No. 1 and 2 have questioned the methodology of determination of profiteered amount claiming that that no methodology has been provided under GST laws, for the calculation of the benefits and their distribution. The Authority finds that provisions for passing of the benefits of reduction in the rate of tax and ITC has been outlined in Section 171 (1) of the CGST Act, 2017 itself which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the said amount available after the GST implementation and taking into consideration various factors like turnover, saleable area, total area, sold area etc. during the pre-GST in the post GST area, the DGAP has come to a conclusion, calculating the amount of the profiteering in the given facts and situation. As such, the Authority concurs with the methodology adopted by the DGAP and rejects the contention of the arguments raised by the Respondents. 40. With regard to the contention of the Respondent No. 1 and 2 on violation of the principle of natural justice, it is observed that Authority has issued a Notice dated 06.11.2020 directing to explain why the DGAP's Report dated 29.10.2020, wherein the DGAP had calculated profiteered amount against the Respondent No. 1 and 2 respectively under section 171 of the CGST Act 2017, should not be accepted and their liability for profiteering should not be determined under section 171 of the Act. They were directed to file their reply to the findings in the said Report. It may be noted here that DGAP has initiated investigation based on the complaint received from the Applicant and the whole proceedings initiated and investigated by DG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 133. The question as to whether any provision of a statute is mandatory or directory depends upon the intent of the Legislature in enactment of such provision. The meaning and intention of the legislature and legislation must govern and these are to be ascertained not only from the phraseology but also by considering its nature, its design and consequences which would follow from construing it one way or other. It is an undeniable fact that the anti-profiteering provisions provided under the CGST Act, 2017 and Rules made thereunder are a beneficial enactment with a view to provide relief to the common person. The statute has not provided for any consequences for failure to adhere to the time limit and it has not provided that in case of non adherence, the whole proceedings would be null and void. Hon'ble Supreme Court in the case of Rajsekher Gogoi vs State of Assam AIR 2001 SC 2313 p2315 has held that when the consequences of nullification on failure to comply with a prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory. It is obvious in any other case such provision is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. (II). consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. (III). in case where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event, the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. (IV). It is further clarified that the period from 15.03.2020 till 28.02.2022 shall stand excluded in computing the period under Section 23(4) and 29A of the Arbitration and Conciliation Act 1996, Section 12A of the Commercial Courts Act 2015 and provisos (b) and (c) of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period (s) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Article 14 and Article 19(1)(g) of Constitution of India, are without proper appreciation of the law. The Parliament as well as all the State Legislatures have delegated the task of framing of the Rules under the CGST Act, 2017 on the Central Government as per the provisions of Section 164 and 171(3) of the CGST Act. Section 171 of the CGST Act, 2017 and the Rules do not infringes upon the fundamental right of equality or right to carry on business of any individual. The mandate of Section 171 is limited to the extent of protecting the interest of consumers by ensuring that both the benefits of tax reduction and ITC, which are the sacrifices of precious tax revenue made from the kitty of the Central and the State Governments, are passed on to the end consumers who bear the burden of the tax. The intent of this provision is the welfare of end consumers, who are unorganized and vulnerable and it is the bounden duty of the Government to ensure that the benefit of the reduction of the tax or the benefit of ITC is passed on to the end consumers. Both the Respondents are absolutely free to exercise their rights to practice any profession, or to carry on any occupation, trade or busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been granted to this Authority after careful consideration at several levels and therefore, there is no ground for claiming that the present delegation is excessive. Since the functions and powers to be exercised by this Authority have been approved by competent bodies, the same are legal and binding on the Respondents. Further, the procedure & methodology for determining the benefits has already been prescribed in Section 171 (1) under the Act itself and hence, it is not required to be prescribed separately. 45. The Respondents have also contended that investigation cannot go beyond the application filed by the Applicant No 1. In this regard, Authority finds that section 171 (1) of the CGST Act, 2017 provides that in the event of any benefit of ITC or reduction of rate of tax, there must be a commensurate reduction in prices of any supply of goods or services. Therefore, the law prescribes that benefit of reduction in the rate of tax or benefit of increase in the ITC should result in commensurate reduction in prices of any supply and every supply. As observed by the Authority in the earlier paragraphs that anti-profiteering provisions are beneficial provisions, which aims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited certain precedents set by this Authority in this regard. The Authority finds that, the value of land is deducted from the turnover as and when the suppliers of construction service raise separate bills/invoices for such sale of land. In such cases the land is a item of sale at a negotiated price between a seller and a buyer and there are separate bills/ invoices for sale of such land and for supply of construction service. In such cases there is a clear bifurcation in these agreements with respect to such two items- one of sale and the other of supply. In such cases, both in the pre GST regime as well as the GST regime, the Service Tax or GST as applicable was charged only on the value of supply of construction service. In such cases, the value of land which is a determinate value as per record was excluded from the turnover of receipts during the respective periods. The facts in this case are not the same. Hence, this contention of the Respondent is not tenable. 48. It has been also claimed by the Respondent that Agreements executed before implementation of GST were taken / offered for renegotiation after July 2017 and such agreements should be taken out of this proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the date of passing of this Order as per the details mentioned in Annexure-'A'. 50. It is also found that the Respondent No. 2 was also required to pass on the benefit of ITC @ 10.51 % of the turnover, which is calculated to the tune of Rs. 1,23,35,442/- to 30 flat buyers other than the Applicant No.1 as he had received consideration only from 30 flat buyers/recipients out of 62. The details of eligible homebuyers/recipients to whom supply has been made by Respondent no. 2 in the impugned Project and from whom additional amount on account of benefit of ITC had been realized by the Respondent no. 2 during period from 01.07.2017 to 30.09.2019 along with details of such additional amount is given in Annexure-'B' to this Order. 51. Accordingly, this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondents shall reduce the prices to be realized from the buyers v of the flats/recipients of the above Project commensurate with the benefit of ITC received by him as detailed above. 52. This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Mumbai, Maharashtra to monitor compliance of this order under the supervision ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
