Tata Play Ltd. Vs Union of India (Delhi High Court)
The petitions challenged the constitutional validity of Section 171 of the Central Goods and Services Tax Act, 2017and related rules, along with a show cause notice and order passed by the National Anti-Profiteering Authority (NAPA). The dispute arose from allegations that the petitioner, engaged in Direct-to-Home services, had not passed on the benefit of input tax credit to consumers, thereby indulging in profiteering. The allegation was based on an investigation report submitted by the Directorate General of Anti-Profiteering.
The petitioner contended that there was no profiteering since the GST rate on its services had increased from 15% to 18%, and it had maintained the same maximum retail price, thereby absorbing additional tax costs. The petitioner also argued that the benefit of input tax credit was offset by the increased tax burden. However, the authority found that the petitioner had profiteered a substantial amount based on the investigation.
The Court noted that the constitutional validity of the anti-profiteering provisions had already been upheld in a prior judgment, and therefore, the challenge to the provisions did not survive. However, the factual determination of profiteering required separate consideration. It was also observed that the regulatory framework had evolved, with the functions of NAPA being transferred to the GST Appellate Tribunal.
