Case Law Details
Mahendra Kishanlal Prajapati Vs Vishwanath Builders (NAA)
The Authority finds that the benefit of additional Input Tax Credit of 3.75% of the turnover has accrued to the Respondent for the project ‘Sarathya’. This benefit was required to be passed on to the recipients. Thus, Section 171 of the CGST, 2017 has been contravened by the Respondent. inasmuch as the additional benefit of ITC @3.75% of the base price received by the Respondent during the period 01.07.2017 to 30.06.2020, was required to he passed on by the Respondent to 215 recipients including the Applicants. These recipients are identifiable as per the documents provided by the Respondent, giving the names and addresses along with Unit no. allotted to such recipients. From the above discussions, the Authority determines that the Respondent has profiteered an amount of Rs.2,95,93,850/-.
10. Therefore, given the above facts. the Authority under Rule 133(3)(a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the homebuyers/customers/ recipients commensurate with the benefit of Fit received by hint The details of the home buyer/customers/recipients and benefit which is required to be passed on to each homebuyers/customers/recipients (including all the 12 Applicants) along with the details of the unit are contained in the Annexure ‘A’ to this Order. The Authority directs that the profiteered amount as determined shall be passed on/returned by the Respondent to the recipients of supply along with interest @18%, as prescribed under Rule 133(3)(b) of the CGST Rules, 2017, from the date such amount was profiteered by the Respondent up till the date such amount is passed on/returned to the respective recipient of supply (if not already passed on) within a period of three months from the dale of this Order failing which it shall be recovered as per the provisions of the CGST Act, 2017.
For the reasons mentioned hereinabove and in the given facts and circumstances and also stated position of law we find that the Respondent has denied the benefit of lit to the homebuyers/customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017. The Authority holds that the Respondent has Committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 30.06.2020. and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.c.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was in operation during the period from 01.07.2017 to 30.06.2020 when the Respondent had committed the above violation. These provisions came into effect from 01.01.2020 i. e. penalty equivalent to ten per cent of the profiteered amount will be imposed upon him for the amount profiteered after 01.01.2020. However, 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. In this regard, Notice be issued to the Respondent.
The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC as determined by the Authority as per the Annexure ‘A’ of this Order be passed on along with interest @18% to each homebuyer/customer/recipient, if not already passed on. In this regard an advertisement may also be published in a minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of the builder (Respondent) – M/s Vishwanath Builders, Project – “Sarathya”, Location- Ahmedabad, Gujarat and amount of profiteering Rs.2.95.93.850/- so that the Applicants along with Non-Applicant homchuyer/customers/recipients can claim the benefit of ITC which has not been passed on to them. homebuyas/customers/recipients may also be informed that the detailed NAA Order is available on Authority’s website www.naa.gov.in. Contact details of concerned Jurisdictional Commissioner CGST/SGST for compliance of this Authority’s order may also be advertised through the said advertisement.
The Authority finds that the Respondent may also be executing other projects under the same GST Registration No. 24ABEPV6263DIZN and the issue of profiteering may arise in the other projects as well. In view or the observation made in the earlier paragraph, the Authority finds that there exists reason to investigate other projects for the purpose of determination of profiteering. Accordingly, this Authority as per the provisions of Section 171 (2) of the above Act take suo-mom cognizance of the same and in terms of Rule 133(5) of the said Rules, directs the DGAP to conduct investigation in respect of the other projects executed under the said registration and submit Report to this Authority for determination whether the Respondent is liable to pass on the benefit of ITC in respect of the other project/towers to the buyers or not as per the provisions of Section 171 ( I ) of the above Act.
