Director General of Anti-Profiteering Vs Prasu Infrabuild Pvt. Ltd. (Competition Commission of India)
In a significant judgment by the Competition Commission of India (CCI), Prasu Infrabuild Pvt. Ltd. has been absolved from allegations of profiteering.
Analysis: The case started with a directive from the National Anti-Profiteering Authority (NAA) to the Director General of Anti-Profiteering (DGAP) to investigate potential profiteering by Prasu Infrabuild in projects beyond their “SKA Green Arch” project. The investigation by the DGAP, which included a detailed review of the company’s operations, revealed that Prasu Infrabuild was not involved in any other project apart from “SKA Green Arch”. The findings were corroborated by the UP Real Estate Regulatory Authority (RERA) and the Deputy Commissioner of State Tax, U.P. Therefore, the DGAP concluded that the provision in Section 171(1) of the CGST Act, 2017 was not applicable in this case.
Conclusion: The CCI, after careful examination of the DGAP’s report and corresponding documents, agreed with the DGAP’s conclusion. Given that Prasu Infrabuild was not involved in any other projects under the investigated GSTIN, the anti-profiteering provisions of Section 171 of the CGST Act, 2017 were not applicable. Consequently, the proceedings against Prasu Infrabuild under Rule 133(5) of the CGST Rules, 2017 were dropped.
FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA
1. The present Report dated 02.03.2023 has been received from the Director General of Anti-Profiteering (hereinafter referred to as the “DGAP”) on 02.03.2023 by the Competition Commission of India (hereinafter referred to as the “Commission”) after a detailed investigation under Rule 133(5) of the Central Goods & Service Tax (CGST) Rules, 2017(hereinafter referred to as the “Rules”). The brief facts of the case are that the erstwhile National Anti-Profiteering Authority (hereinafter referred to as the “NAA”) in the case of M/s Prasu Infrabuild Pvt. Ltd, GH-05B, Sector-16B, Greater Noida West, Uttar Pradesh (Project: “SKA Green Arch”, Noida) (hereinafter referred to as “the Respondent”), vide Para-27, 28 of the Order No. 72/2022 dated 13.09.2022 had directed the DGAP to investigate profiteering in relation to projects other than the project ” SKA Green Arch” being constructed by the Respondent under single GST Registration No. i.e. 09AAGCP220N1ZW under Rule 133(5) of the Rules, and submit investigation report to the NAA for determination whether the Respondent was liable to pass on the benefit of ITC in respect of all the other Projects/Blocks to the buyers, or not, as per the provisions of Section 171(1) of the CGST Act, 2017.
2. Vide the above mentioned Report, the DGAP has submitted that:-
i. The NAA went through the Investigation Report dated 29.10.2021, submitted by the DGAP in the subject case of the Respondent and vide Para 27, 28 of the Order No. 72/2022 dated 13.09.2022 determined that the Respondent had realized an additional amount of Rs. 4,75,87,468/- (inclusive of applicable GST @12%) from 206 home buyers during the period from 01.07.2017 to 31.10.2020.
ii. Further, vide Para 35 of the aforesaid order, NAA directed the DGAP in terms of Rule 133(5)(a) of the CGST Rules to investigate profiteering in relation to other projects executed by the Respondent, if any, under the provision of Section 171 of the CGST Act, 2017. The contents of para 35 are reproduced below for reference:
“35 Since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects also under the GSTIN 09AAGCP9220N1ZVV. The Authority has reasons to believe that the Respondent may have resorted to profiteering in the other projects also and hence, it directs the DGAP under Rule 133 (5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of Section 171 of the CGST Act, 2017 and submitted complete investigation report for all the Projects under this single GST Registration.”
iii. As directed by the NAA in the Order No. 72/2022 dated 13.09.2022 received by the DGAP on 22.09.2022, a notice under Rule 129 of the CGST Rules, 2017 was issued by the DGAP on 26.09.2022, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the customers of projects other than “SKA Green Arch”, if any, by way of commensurate reduction in price and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all the supporting documents.
iv. The period covered by the current investigation was from 01.07.2017 to 31.08.2022.
v. In terms of Rule 133(5)(b) of the Rules, read with Rule 129(6) of the Rules, the time limit to complete the investigation was on or before 21.03.2023.
vi. In response to the notice dated 27.09.2022, the Respondent replied vide e-mail dated 13.10.2022 that apart from the project namely; ‘SKA Green Arch’, the Respondent had not undertaken any other project. Accordingly, there was no question of profiteering by the Respondent in respect of other projects.
vii. In order to verify Respondent’s claim that he had not undertaken any project other than “SKA Green Arch”, the details of Respondent’s project registered with UP Real Estate Regulatory Authority (RERA) were checked online. From the UP RERA website, it was observed that the Respondent had taken a single RERA registration of two phases under SKA Green Arch project. In the first phase, there were two towers namely, Aster Tower and Orchid Tower and in the second phase, there were two towers namely, Tulip Tower and Zinnia Tower. However, the investigation had already been done for both the phases of the SKA Green Arch project. Further, no other project of the Respondent except SKA Green Arch project was registered with RERA. The details were as follows:
