Case Law Details
Sh. Rahul Sharma on behalf of Local Circles India Pvt. Ltd. Vs Mataji Paints and Hardware (NAA)
Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for imposition of penalty under the provisions of the above Section. However, since the provisions of Section 171 (3A) have come into force w.e.f. 01.01.2020 whereas the period during which violation has occurred is w.e.f. 27.07.2018 to 30.09.2018, hence the penalty prescribed under the above Section cannot be imposed on Respondent retrospectively. Accordingly, Show Cause Notice directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him is not required to be issued.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The National Anti-Profiteering Authority (NAA) vide Order dated 26.06.2020 in this matter has given the following order:
“25. It is clear from the above narration of the facts that the profiteered amount has been computed by comparing the average pre-rate reduction base prices of the impacted products with the monthly average post- rate reduction base prices in respect of both the tax reductions. The above mathematical methodology adopted by the DGAP to compute the profiteered amount is not in line with the methodology adopted by the DGAP himself in similar cases of profiteering wherein the average pre-rate reduction base price have been compared with the actual post rate reduction prices to compute the profiteered amount. Further, in case the mathematical methodology of comparing the average to average base prices employed by the DGAP is adopted, it would not be possible to compute the benefit of tax reduction which is due to each customer to each supply. The profiteered amount computed by DGAP would not be correct. Hence the above mathematical methodology adopted by the DGAP is not correct, logical, appropriate and in consonance with the provisions of Section 171 of the CGST Act, 2017. Therefore, the Reports dated 23.3.2019 and 10.10.2019 furnished by the DGAP cannot be accepted. Accordingly, the DGAP is directed to reinvestigate the above case under Rule 133 (4) of the CGST Rules, 2017. The DGAP directed to compare the average pre-rate reduction base prices of the products which were impacted by the tax rate reduction w.e.f 27.7.2018 with the actual rate reduction base price of the impacted products.”
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