Rishabh Jain Vs Assotech Ltd. (NAA)
NAA held that DGAP Report dated 29.06.2020 cannot be accepted and the DGAP is directed to further investigate the matter as per the provisions of Rule 133 (4) of the above Rules on the following issues and furnish his fresh Report in terms of Rule 129 (6):-
(i) On which date the Respondent has passed on the benefit of ITC to the flat buyers? A receipt be obtained from each flat buyer who has been claimed to have been passed on the benefit of ITC by the Respondent and furnished with the Report.
(ii) Whether the Respondent has paid interest @18% to the flat buyers from the date from which he has received the excess amount till the date of passing on the benefit of ITC and what was the amount thereof in respect of each buyer?
(iii) In case the Respondent has not paid the interest then what is the amount due to each flat buyer?
(iv) In what manner the Respondent has paid the benefit ITC to the Applicant No. 1 on 19.04.2019 when he had already handed over possession of the flat during October, 2017 and had also issued no dues certificate on 24.10.2017.
(v) Whether the Respondent has availed benefit of ITC w.e.f. 01.08.2019 and whether he is liable to pass on the same. In case it is so the DGAP shall compute the benefit to be passed on to the each flat buyer along with the interest, from the above date till 31.12.2020 or till the Completion Certificate is obtained by the Respondent whichever is earlier.
36. The DGAP will be at liberty to seek assistance of the filed Tax Authorities of the Central Government and the State of Uttar Pradesh during the course of the investigation as per the provisions of Rule 136. The Respondent is also directed to provide all assistance to the DGAP.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 29.06.2020 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after a detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the present case are that a reference was received from the Standing Committee on Anti- profiteering on 05.08.2019 by the DGAP to conduct a detailed investigation in respect of an application filed under Rule 128 (1) of the CGST Rules, by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of Flat No. G-A0009, in the Respondent’s project “Assotech Windsor Court Society” situated in Sector-78, Noida. The Applicant No. 1 had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price and had charged GST ©12% on the amount due to him against payments.
2. The Applicant No. 1 had also submitted that he had purchased the flat in January, 2014 and at the time of possession/handover in October, 2017, he had paid the amount with applicable GST. He had also submitted that the Respondent assured him about passing on the benefit of Input Tax Credit at the end of FY 2017-18. The above Applicant had attached a copy of the e-mail dated 04.10.2017 where the Respondent had informed that “We extend our commitment that any Input Tax Credit (ITC), available will be very transparent) calculated and benefit will be proportionately passed accordingly for all the payments coming post-GST and where GST has been deducted @12%. Since it is the initial stage of GST implementation and it will take some time to settle down, hence we request our esteemed customers not to get worried. Since the whole process of GST Implementation is system driven and software based, we at Assotech have upgraded our ERP Systems and whole calculation will be done at the end of the financial year.”
3. The Applicant No. 1 had alleged that even after 6 months from the end of financial year 2017-18, the Respondent had not provided him the benefit of input tax credit. Apart from the above e-mail the Applicant No. 1 had also submitted the estimated working sheet and copies of payment receipts given to him at the time of possession.
4. The DGAP has reported that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 05.08.2019, a Notice under Rule 129 (3) of the above Rules was issued on 14.08.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of input tax credit had not been passed on to the recipients by way of commensurate reduction in prices 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 documents in support of his reply. Further, the Respondent was afforded opportunity to inspect the non-confidential evidence/information which formed the basis of the said Notice, during the period from 21.08.2019 to 23.08.2019. However, the Respondent availed of the said opportunity on 28.08.2019. Vide email dated 08.06.2020, the Applicant No. 1 was also given opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 15.06.2020 or 16.06.2020. However, the Applicant No. 1 did not avail of the said opportunity. The DGAP has stated that the investigation in this case has been carried out for the period from 01.07.2017 to 31.07.2019.
5. The DGAP has also stated that the time limit to complete the investigation was extended up to 04.05.2020 by this Authority, in terms of Rule 129 (6) of the Rules, vide order dated 28.01.2020 which further stood extended up to 30.06.2020 by virtue of Notification No. 35/2020-Central Tax dated 03.04.2020 issued by the Central Government under Section 168A of the Central Goods and Services Tax Act, 2017, which stated that where any time limit for completion/ furnishing of any report, has been specified in, or prescribed or notified under the Central Goods and Service Act,2017 which fell during the period from the 20th day of March, 2020 to the 29th day of June, 2020, and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action, would be extended up to the 30.06.2020. The same was also informed to this Authority by the DGAP vide letter dated 28.04.2020.
6. In his Report the DGAP has stated that in response to the notice dated 14.08.2019 and various reminders, the Respondent replied vide letters/e-mails dated 28.08.2019, 30.09.2019, 24.10.2019, 18.11.2019, 20.04.2020 and 08.06.2020 in which he has stated:-
a. That his Company was under provisional liquidation since 08.02.2016 and the Hon’ble High Court of Delhi vide its Order in C. P. No. 357/2015 dated 08.02.2016 has appointed Official Liquidator attached to the Hon’ble Court as his provisional Liquidator to take into possession all the assets and record of the Company. Further, as per the provisions of Section 456 of the Companies Act, 1956 all the assets/properties/affects etc. have vested in the Hon’ble High Court through its Official Liquidator.
b. That he was working under the supervision of Court Commissioner and Official Liquidator appointed by the Hon’ble High Court of Delhi which has also directed him to supervise the completion of the projects and expenses incurred/to be incurred thereon. The Hon’ble High Court has also directed all Government Authorities and others that no coercive steps would be taken against the Respondent to recover any dues.
c. That in the subsequent development, the Hon’ble High Court has directed the Official Liquidator to appoint an Auditor to ascertain the total assets and liabilities including statutory dues and subsequently M/s Rajput Jain & Associates have been appointed to ascertain the Respondent’s assets and liabilities. The Auditor has ascertained the tax liability and the same was submitted by him before the Hon’ble High Court of Delhi. According to the Audit Report total Service Tax liability has been quantified at Rs. 1,97,03,415/-. The Respondent has also informed that he has applied to avail the benefit of the SVLDRS Scheme to regularise the above amount.
d. That on implementation of GST w.e.f. 01.07.2017, he had assured his customers including the Applicant No. 1 that the benefit of ITC available to him would be proportionately pas on for all the payments coming post-GST and where GS had been deducted @12%. Accordingly, the Respondent had passed on an amount of Rs. 82,48,485/- to his customers in the project “Assotech Windsor Court Society” even prior to initiation of present proceedings.
7. Vide the aforementioned letters/e-mails, the Respondent has submitted the following documents/ information:
a. Copies of GSTR-1 Returns for the period from July, 2017 to July, 2019.
b. Copies of GSTR-3B Returns for the period from July, 2017 to July, 2019.
c. Copy of Electronic Credit Ledger for the period from July, 2017 to August, 2019.
d. Copies of ST-3 Returns for the period from April, 2016 to June, 2017 along with application under SVLDRS Scheme.
e. Copies of VAT Returns for the period from April, 2016 to June, 2017 along with copy of VAT Assessment Order for the FY 20162017.
f. Copies of Allotment Letters, demand letters, Credit notes and receipts issued to the Applicant No. 1.
g. Tax rates – pre-GST and post-GST.
h. Copies of Balance sheets for FY 2016-17 & 2017-18.
i. Copy of Project Report submitted to RERA.
j. CENVAT/ Input Tax Credit Register for the period from April, 2016 to July, 2019.
k. Details of turnover, output tax liability, GST payable and input tax credit availed by the Respondent.
l. List of home buyers in the project “Assotech Windsor Court Society” along with details of benefit passed on.
m. Copies of Credit Notes vide which benefit of GST ITC passed on to the customers.
8. The Respondent has requested to consider all his information/ documents as confidential in terms of Rule 130 of the Rules.
9. The DGAP has also reported that the reference received from the Standing Committee on Anti- profiteering, various replies of the Respondent and the documents/evidence on record has been carefully scrutinised. The main issues for determination were:
(i) Whether there was benefit of reduction in the rate of tax or input tax credit on the supply of construction service by the Respondent, on implementation of GST w.e.f. 01.07.2017 and if so;
(ii) Whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the Central Goods and Services Tax Act, 2017.
10. The DGAP has further reported that the Respondent, vide his reply has submitted payment plan, allotment letter and payment receipts for the sale of Flat No. G-A0009, to the Applicant No. 1, measuring 1390 square feet (super area), at basic sale price of Rs. 5,175/- per sq. fe The details of the amounts and the taxes of the Flat paid b the Applicant No. 1 to the Respondent have been furnished in Table-A’
Table-`A’
(Amount in Rs.)
