Case Law Details
Sh. Ratish Nair Vs M/s. Man Realty Ltd. (National Anti-Profiteering Authority)
It is established from the perusal of the above facts that the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has profiteered an amount of Rs. 1,27,84,694/-inclusive of GST @ 12% on the base profiteered amount of Rs.1,14,14,905/-. Further, the Respondent has realized an additionalamount of Rs. 1,27,84,694/- which includes both the profiteered amount @5.99% of the taxable amount (base price) and GST on the said profiteered amount from the flat buyers who were not Applicants in the present proceedings as per Annexure-18 of the Report. These buyers are identifiable as per the documents placed on record and therefore, the Respondent is directed to pass on this amount of Rs. 1,27,84,694/-along with interest @18% per annum to these flat buyers from the dates from which the above amount was collected by him from these buyers till the payment is made, within a period of 3 months from the date of passing of this order. The above amount shall be paid as has been mentioned in Column No. 21 of Annexure-18 without taking in to account the discount mentioned in Column No. 24 of the above Annexure. The Respondent has submitted details of the discounts amounting to Rs. 1,11,61,090/- which he has claimed to have paid to the 65 home buyers as per Annexure-1 submitted by him on 30.05.2019 however it cannot be considered as passing on of the benefit of additional ITC as the above discount has been given by the Respondents to set off the prices which he had increased and not on account of the benefit of ITC. Accordingly, the discount of Rs. 1,11,61,090/- claimed to have been paid to the house buyers by the Respondent cannot be held as the benefit of ITC and hence, the claims made by the Respondents in this behalf cannot be accepted.
As discussed above the Applicant is not entitled to the benefit of additional ITC as his allotment has been cancelled by the Respondent on his own request. Therefore, the relationship of recipient and supplier stands terminated between the above Applicant and the Respondent w.e.f. 24.11.2018 and therefore, he is not entitled to the benefit of additional ITC as per the provisions of Section 171 of the CGST Act, 2017. He has further not paid the amount which he was required to pay in the pre and post GST period as per the terms of his allotment to become eligible for passing on of the benefit of ITC and therefore also he is not entitled to the above benefit.
In view of the above facts this Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. Since the present investigation is only up to 30.09.2018 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent.
It is also evident from the above narration of the facts that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his One Park Avenue project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. Accordingly, the notice dated 09.04.2019 vide which the Respondent was directed to show cause why action under Section 29 and 122-127 of the CGST Act. 2017 should not be taken against him is hereby withdrawn.
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