Rajeev Goyal Vs Prateek Infra Projects India Pvt. Ltd. (Competition Commission of India)
Introduction: The Competition Commission of India (CCI) recently rendered its decision on the allegations brought forth by Rajeev Goyal against Prateek Infra Projects India Pvt. Ltd. The case involves claims of profiteering in the purchase of flats in the “Prateek Edifice” project in Noida, Uttar Pradesh. The matter was initially investigated by the Director General of Anti-Profiteering (DGAP) and subsequently re-evaluated based on the directives of the National Anti-Profiteering Authority (NAA).
Background:
- The report dated 14.02.2023 follows a re-investigation under Rule 129(6) of the CGST Rules, 2017.
- Allegations involve profiteering by Prateek Infra Projects in the sale of flats in the “Prateek Edifice” project.
DGAP’s Initial Findings:
- The DGAP’s report dated 27.11.2020 identified a profiteered amount of Rs.11,99,09,043, including GST.
- Benefit of ITC had allegedly not been fully passed on to home buyers.
NAA’s Directive for Re-Investigation:
- The NAA, observing discrepancies, directed the DGAP to re-investigate specific points, including verifying information provided by applicants and recalculating the saleable area based on RERA documents.
DGAP’s Report (14.02.2023):
- Detailed responses to NAA’s directives were provided, addressing issues related to documents’ authenticity and recalculating saleable area.
- Profiteering computation, as per the earlier report, was upheld, concluding that Prateek Infra Projects violated Section 171 of the CGST Act, 2017.
Conclusion: The DGAP’s report of 14.02.2023 reaffirms the findings of profiteering against Prateek Infra Projects. Despite objections raised by the complainant, the investigation concludes that the Respondent contravened Section 171(1) of the Act by not passing on the full benefit of ITC to home buyers. The Competition Commission will consider this report in its final decision.
FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA
1. The present Report dated 14.02.2023 has been received from the Director General of Anti-Profiteering (hereinafter referred to as “DGAP”) after detailed re-investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017 (hereinafter referred to as “the Rules”) pursuant to Interim Order No. 08/2022 dated 27.07.2022 passed by the erstwhile National Anti-Profiteering Authority (hereinafter referred to as “NAA”) under Rule 133(4) of the CGST Rules, 2017.
2. The brief facts of the present case are that the Applicant No. 1 & 2 had filed application before the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017, alleging profiteering by the Respondent in respect of purchase of Flat Nos. C-1105 and G-1115 respectively in the Respondent’s project “Prateek Edifice”, situated in Sector-107, Noida, Uttar Pradesh. The aforesaid reference was examined by the Standing Committee on Anti-profiteering, whereby it was decided to refer the matter to the DGAP, to conduct a detailed investigation. The said application was examined by the DGAP and the Investigation Report dated 27.11.2020 under Rule 129(6) of the Rules, was furnished to the NAA. Vide the said Report, it was submitted that on the basis of the CENVAT/Input Tax Credit availability pre and post-GST and the details of the amount collected by the Respondent from home buyers during the period 01.07.2017 to 31.12.2019, the amount of benefit of input tax credit that has not been passed on by the Respondent to the recipients or in other words, the profiteered amount worked out to Rs.11,99,09,043/- (including GST) which was inclusive of profiteered amount of Rs. 1,75,220/- in respect of the Applicant No. 1 and profiteered amount of Rs. 59,437/- in respect of the Applicant No. 2. It was also mentioned that the Respondent had passed on ITC benefit of Rs. 14,28,58,414/- to 302 homebuyers as mentioned in Table – `D’ of the DGAP’s report dated 27.11.2020 which had been verified from the documentary evidences submitted by the Respondent and confirmations received from the buyers. Further, the Respondent was yet to pass an additional amount of Rs. 7,70,819/- to the 19 home buyers including the Applicant Nos. 1 & 2 which included both the profiteered amount @7.37% of the base price and GST on the said profiteered amount. Thus, it was concluded that the Respondent had contravened the provisions of Section 171 of the Central Goods & Service Tax Act, 2017 (hereinafter referred to as “the Act”).
3. In pursuance to the above Report of the DGAP, the NAA, after carefully considering the Report filed by the DGAP, the submissions of the Applicant No. 1 and the Respondent and other material placed on record had observed certain discrepancies in the DGAP’s Report dated 27.11.2020 and vide Para 6(a) & 6(b) of the above I.O. No. 08/2022 dated 27.07.2022, the NAA referred the matter back to the DGAP and directed it to re-investigate the matter and to submit a comprehensive report on the following grounds: –
a) To re-verify the information provided by the Applicant No. 1 in his affidavit based upon a given set of documents vide which he has claimed that he and his cousin (Sh. Vikas Agarwal) simultaneously booked flats on same date and identical terms and conditions but the profiteering amount determined by DGAP was different.
b) The actual saleable area as per the declaration made by the Respondent under RERA was 12,39,814 sq. ft. The same was needed to be examined by the DGAP and therefore, the DGAP was directed to recalculate the saleable area based upon the RERA documents/registration of the Respondent.
4. Accordingly, the DGAP has submitted his report on 14.02.2023 under Rule 133(4) of the CGST Rules, 2017, wherein, it has been stated that: –
I. Reply to the observations made by NAA vide Para 6(a) of I.O. No. 08/2022 dated 27.07.2022
a. As directed by the NAA, to check the veracity of documents submitted by the Respondent during the earlier investigation, the DGAP asked the Respondent to submit the Builder buyer agreement as well as customer ledgers in respect of Applicant No. 1, Applicant No. 2 and Sh. Vikas Agarwal.
b. Vide letter dated 27.01.2023, the Respondent submitted copies of builder buyer agreements and customer ledgers for Applicant No. 1, Applicant No. 2 and Sh. Vikas Agarwal and stated that Applicant No. 1 and Sh. Vikas Agarwal had booked unit No. C — 1105 & 1106 on same date, but the ad hoc charges to be charged from them were separate. The Respondent also submitted that benefit of ITC given to each customer was computed individually depending on various factors such as cost of flat, installment due date, installment payment date, date of booking etc. and thus the benefit of ITC given to both Applicant No. 1 and Sh. Vikas Agarwal was not comparable.
c. On scrutiny of all the documents submitted by the Respondent in relation to the above mentioned issue, it was observed that the demand and advances received from both the Applicants & Sh. Vikas Agarwal as reflected in the home buyers list submitted by the Respondent during the earlier investigation was different. Further, the submission of Respondent that benefit of ITC given to each customer was computed individually depending on various factors such as cost of flat, installment due date, installment payment date, date of booking etc. was considerable as it was noticed that the Respondent had passed on different amount of ITC benefit to different buyers based on the relevant factors. The details has been given in Table ‘A’ below:-
Table ‘A’
