Case Law Details
Sh. Rahul Sharma Vs Reckitt Benckiser India Pvt. Ltd. (National Anti-Profiteering Authority)
The Respondent has further contended that there was no stipulation in Section 171 which required that the benefit of rate reduction should be passed on to the customers by ‘commensurate reduction’ only in cash and methods like increase in the quantity of goods supplied and promotional offer of giving an item free along with main product etc. were not to be followed.
He has also claimed that the provisions of the above Section could not be constructed to come to the above conclusion. As has been discussed in para supra the benefits mentioned in Section 171 (1) have to be passed on by way of commensurate reduction in prices only and the above Section does not provide for any other method of passing on the benefit. Therefore, the provisions of the above Section cannot be construed in any other manner. He has also relied upon the judgement passed by the Hon’ble Supreme Court in the case of Southern Petrochemical Industries Company Ltd. v. Electricity Inspector and ETIO and others (2007) (5 SCC) 447 in his support. However, in view of the express provisions of Section 171 (1) of the CGST Act, 2017, the above judgement does not help the cause of the Respondent.
The Respondent No. 1 has further contended that the additional GST charged has been included in the profiteered amount whereas it has been deposited with the Government. In this connection it would be appropriate to mention that the Respondent No. 1 has not only collected excess base price from the customers which they were not required to pay due to the reduction in the rate of tax but he has also compelled them to pay additional GST on the excess base price which they should not have paid. By doing so the Respondent No. 1 has defeated the very purpose of both the Central and the State Governments which aimed to provide the benefit of rate reduction to the gene public. The Respondent No. 1 was legally not required to collect the excess GST and therefore, he has not only violated the provisions of the CGST Act, 2017 but has also acted in contravention of the provisions of Section 171 (1) of the above Act as he has denied the benefit of tax reduction to his buyers by charging excess GST. Had he not charged the excess GST the customers would have paid less price while purchasing the above product from the Respondent and hence the above amount has rightly been included in the profiteered amount as it denotes the amount of benefit denied by the Respondent No. 1 as price includes tax also. The above amount can also not be ordered to be transferred to the CWFs as the Respondent No. 1 has deposited it in the Government Treasury and it can be refunded only to the Respondent if he is found eligible to claim it. The above amount has to be deposited in the CWFs as the buyers are not identifiable as per the provisions of Rule 133 (3) (c). Therefore, the above contention of the Respondent No. 1 is untenable and hence the same cannot be accepted.
The Respondent No. 1 has relied upon the case of R. S. Joshi Sales Tax Officer Gujarat v. Ajit Mills Limited (1977) 4 SCC 98 in this regard, wherein the Hon’ble Supreme Court had analysed what the term ‘collected’ meant in the context of the sales tax legislation of Gujarat. However, in view of the reasons given in para supra the law settled in the above case is not applicable in the facts of the present case.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
