HCBS Promoters & Developers Pvt. Ltd. guilty of profiteering under GST: NAA

Bhanja Kishore Pradhan Vs. HCBS Promoters & Developers Pvt. Ltd. (NAA)

The Respondent has not disputed the findings of the DGAP regarding method of computation of profiteering and the amount worked out by him. As such, the Authority finds no reason to differ from the above-detailed computation of profiteering in the DGAP’s Report or the methodology adopted and hence, the Authority determines the profiteered amount for the period from 01.07.2017 to 31.12.2018, in the instant case, as Rs. 1,42,45,741/-, for the project ‘Sports Ville’.

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 customers/ home/shop buyers commensurate with the benefit of ITC received by him as has been detailed above.

The Respondent is required to pass on/return such amount profiteered by him along with interest as prescribed under Rule 133(3)(c) of the CGST Rules, 2017, to the eligible customers/ home/shop buyers, including the Applicant No. 1 .

The Respondent has filed his various written submissions vide which he had submitted that he has passed benefit of ITC of Rs. 1,42,56,347/- to his customers/ home/shop buyers. The Respondent has further contended that he did not agree with the Report dated 30.09.2020 as he had adjusted the benefits passed on to the customers and from their dues.

In this regard, the Authority finds that the verification carried out by the DGAP regarding the claim of the Respondent for passing the benefit of ITC to his home/flat buyers is not conclusive as out of the said 62 home buyers as mentioned at para 17, to whom the emails were sent by the DGAP to verify whether the benefit of ITC claimed to have been passed on by the Respondent, 26 home buyers have not replied till date. Further, in response to previous emails of the DGAP to the customers/ home/shop buyers as per its supplementary report dated 11.01.2021, 30 other customers/ home/shop buyers not figuring in this Authority’s list for randomisation, had submitted their responses out of which most of the customers/ home/shop buyers have replied in negative i.e. had claimed that they had not received any amount from the Respondent. The Authority finds that verification by means of email is not conclusive proof of passing of the benefits. The email can be created/generated by any person, which may or may not belong to the home buyer. The Authority finds that the conclusive proof of passing the benefits are only through accounts like credit note, refund of amount as reflected in bank account or reduction in price as reflected in invoice. Since no such evidence has been produced by the Respondent his claim of having passed on the benefit is not tenable and hence it cannot be accepted.

The complete list of eligible customers/ home/shop buyers along with Unit number and the profiteered amount due to be returned/passed on/ refunded to each of them is annexed as Annexure ‘A’ to this Order.

Therefore, the Authority directs the concerned jurisdictional CGST/SGST Commissioner to ensure that such amounts are returned/passed on/ refunded along with interest as prescribed under Rule 133(3)(c) of the CGST Rules, 2017 to each customers/ home/shop buyers by the Respondent, if not already paid. As observed by the Authority, the conclusive proof of passing benefits and its method is discussed in the earlier paragraphs.

The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 1,42,45,741/-, for the project ‘Sports Ville’. Hence the Respondent is directed to also pass on interest @18% to the customers/ home/shop buyers on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ return/refund, as prescribed under Rule 133 (3) (b) of the CGST Rules 2017.

We also order that the profiteering amount of Rs. 1,42,45,741/- for the project ‘Sports Ville’ along with the interest @ 18% from the date of receiving of advance from the customers/ home/shop buyers till the date of passing the benefit of ITC shall be paid/passed on by the Respondent within a period of 3 months from the date of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017.

FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY

1. A Report dated 02.07.2019 had been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that the Applicant No. 1 filed an application dated 19.09.2018, before the National Anti-profiteering Authority (Authority) under Rule 128 (1) of the CGST Rules, 2017 alleging profiteering by the Respondent in respect of purchase of Flats in his “Sports Ville” project located in Sector-2 & 35, Sohna, Gurgaon. The above Applicant No. 1 also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) availed by him by way of commensurate reduction in the price of the above flats. The said application was forwarded by this Authority to the Standing Committee on Anti-profiteering for further necessary action. The aforesaid  pplication was considered by the Standing Committee on Anti-profiteering, in its meeting held on 27¹” December, 2018, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in to the complaint according to Rule 129 (1) of the CGST Rules, 2017. The DGAP has covered the period from 01.07.2017 to 31.12.2018 for the investigation and relevant documents were called from the Respondent. From the data submitted by the Respondent for the period April, 2016 to December, 2018, the details of the input tax credits availed by him, his turnovers from the project “Sports Ville”, the ratios of input tax credits to the turnovers, during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to December, 2018) periods were worked out by the DGAP and the same are given in the Table-A’ below:-

Table-A’

(Amount in Rs.)

The DGAP has observed from the Table-A’ above that the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 2.34% and during the post-GST period (July, 2017 to December, 2018), it was 5.65%, which confirmed that, post-GST, the Respondent has been benefited from additional ITC to the tune of 3.31% [5.65% (-) 2.34%] of the turnover.

2 Accordingly, on the basis of the figures contained in Table-LA’ above, the comparative figures of the ratio of input tax credit s availed/available to the turnover in the pre-GST and post-GST periods as well as the turnover, the recalibrated base price and the excess realization (profiteering) during the post-GST period, were tabulated by the DGAP as has been given in Table below:-

Table-‘B’

(Amount in Rs.)

The DGAP concluded that the total benefit of ITC that the Respondent was required to pass on during the period 01.07.2017 to 31.12.2018 in respect of both residential flats as well as commercial shops, came to Rs.1,42,45,741/- which included GST (@ as applicable) on the base amount of Rs. 1,29,68,303/-. Out of the total profiteered amount of Rs.1,42,45,741/-, the Respondent has realised additional amount of Rs. 70,728/- from the Applicant No. 1, inclusive of GST.

3. The DGAP vide Table-‘D’ of his Report dated 02.07.2019, had reported that the Respondent had claimed to have already passed on benefit of Rs. 1,42,56,347/- to his home buyers during the period from 01.07.2017 to 31.12.2018.

4. The above said Report dated 02.07.2019 was forwarded to the Respondent and after hearing the matter with the Respondent, the Authority vide it Interim Order No. 04/2020 dated 03.01.2020 directed the DGAP to verify the amount of ITC benefit claimed to have been passed on to the home buyers by the Respondent as per the provisions of Rule 133(4) of the CGST Rule, 2017 and submit his Report clearly mentioning the verified amount of benefit passed on by the Respondent to his home buyers and the balance amount still to be passed on to each of the home buyers.

5. Accordingly, the DGAP submitted his report on 30.09.2020 under Rule 133(4) of the CGST Rules, 2017, inter alia, stating:-

a. That on receipt of the aforesaid order dated 03.01.2020 from this Authority on 06.01.2020, a letter dated 22.01.2020 and further reminders dated 17.02.2020, 02.06.2020, 21.07.2020 and 29.07.2020 were issued to the Respondent calling for all credit notes, demand notes and ledger accounts and contact details (email address, contact nos.) of all homebuyers for verification of amount of benefit of ITC passed on by the Respondent.

b. That the Respondent didn’t submit required information even after repeated reminders, hence summons dated 01.07.2020 were issued to the Respondent. In response to the summons, the Respondent vide email dated 28.07.2020 submitted acknowledgement receipts from 20 home buyers regarding passing of the benefit. As the contact details of home buyers were not provided by the Respondent, another summons dated 24.08.2020 were issued to the Respondent. In response to summons, the Respondent vide email dated 03.09.2020 submitted the contact details of 724 home buyers.

c. That the Respondent has submitted his replies dated 22.02.2020, 05.05.2020, 21.05.2020, 14.07.2020, 28.07.2020 and 03.09.2020. The Respondent submitted the soft copies of ledger Accounts (MS-Excel format), letters (pdf format) issued to the customers, summary list of ITC passed on, acknowledgement receipt of 20 home buyers and contact details (724 home buyers) of the homebuyers in his project “Sports Ville”. The Respondent vide his reply dated 21.05.2020 had submitted that he intended to reconcile the customer accounts at the time of possession, in all respect. Further, the Respondent vide reply dated 13.07.2020 submitted that they had obtained Occupation Certificate and had issued offer for possession, inviting all customers to complete documentation and take possession, but due to COVID-19, few people had approached him.

d. That the ITC benefit claimed to have been passed on to his home buyers by the Respondent, the verification had been done of the ITC passed on to individual customers (as provided by the Respondent) with the soft copies of Ledger Accounts (MS-Excel format), letter (pdf format) issued to customers, as submitted by the Respondent. On verification of the copies of Ledger Accounts, it appeared that the Respondent had claimed to pass on the ITC benefit of Rs. 1,42,56,347/- to 768 home buyers only. Further it was also observed that in some cases, the Respondent had claimed to pass on the benefit of additional ITC than the actual amount. In some cases, the benefit of ITC passed on was less than the amount that should have been passed on. A summary of category-wise ITC benefit required to be passed on (profiteering amount as per Report dated 02.07.2019) and the benefit claimed to be passed on by the Respondent, have been furnished by the DGAP in Table-‘C’ below: –

Table-C

As illustrated in the Table-‘C’ above, it was seen that in case of 46 home buyers, the Respondent was required to pass on the ITC benefit of Rs. 29,71,286/- whereas the Respondent had claimed to have passed on additional ITC benefit of Rs. 9,08,472/- only. Therefore, additional ITC benefit of Rs. 20,62,814/- was required to be passed on to these 46 home buyers. Further, in case of 13 home buyers, the Respondent was required to pass on the ITC benefit of Rs 1,93,220/-, whereas the Respondent had not passed on the ITC benefit to these 13 home buyers

e. That to substantiate Respondent’s claim of passing on of benefit, 20 acknowledgement receipts were tallied with the list of ITC passed on to individual customers (as provided by the Respondent). The summary of 20 acknowledgement receipts has been furnished by the DGAP in Table-ID’ below:

Table-D

From the above table, it could be seen that the Respondent’s claim of passing on of benefit was not in consonance with the acknowledgement receipts. It appeared that the Respondent had passed on the benefit of ITC amounting to Rs, 2,61,698/-(Column-El + E2) to 15 home buyers (mentioned at S. No. 1 & 2). The Respondent had passed on less benefit to 04 home buyers (mentioned at S. No. 3) to the tune of Rs. 1,93,579/-(Column E3 -D3) and no benefit had been passed on to 01 home buyer (mentioned at S. No. 4, Column E4). The Respondent had to further pass on the due benefit of Rs. 2,11,023/- (Rs. 1,93,579/- (+) Rs. 17,444/-) to these 04 home buyers. As per the above discussion, it was evident that there was variation in the submissions of the Respondent himself.

f. That to verify the Respondent’s claim of passing on of the benefit of ITC, email dated 16.09.2020 was sent to 186 home buyers, randomly selected, to confirm the amount of benefit received from the Respondent. As the home buyers didn’t respond, second email dated 21.09.2020 was sent to other 62 additional home buyers, selected randomly. In response to these 248 emails, which was more than 30% of 768 home buyers, only 21 home buyers (i.e. 8.5% of sent) responded. Out of these 21 home buyers, 15 have denied receipt of any correspondence from the Respondent. Other 06 home buyers confirmed the receipt of letter from the Respondent, but till date they have actually not received any benefit. Also, benefit amount as intimated by 02 (out of 06) home buyers in their reply didn’t match with the submissions made by the Respondent. On the basis of replies submitted by various home buyers, it was observed that none of the home buyers had confirmed the receipt of any benefit. Hence, it appeared that the Respondent had not passed on the due benefit to the 753 (i.e. 768-15) home buyers.

g. That the benefit of additional ITC to the tune of Rs. 1,39,01,353/-(Rs. 1,42,45,741 (-) Rs. 2,61,698/- (-) Rs. 82,690/-), could not be verified with the Respondent’s submissions. Therefore, the total benefit of ITC of Rs. 1,39,01,353/- which included GST (@ 12% or 8%) on the base amount was required to be passed on to the home buyers.

h. That the Respondent’s claim of passing on of the benefit of ITC to his homebuyers was not verified, and therefore, could not be accepted. Thus, the profiteering amount of Rs. 1,39,01,353/-was required to be returned to eligible recipients.

6. The above Report was carefully considered by this Authority and a notice dated 07.10.2020 was issued to the Respondent to explain why the Report dated 30.09.2020 furnished by the DGAP should not be accepted and his liability for profiteering in violation of the provisions of Section 171 should not be fixed. The Respondent was directed to file written submissions which have been filed on 24.11.2020 in which the Respondent has submitted:-

That the Respondent had submitted the complete payment details of the benefit of ITC passed on to his customers, which had been accepted by this Authority.

a. That in furtherance of his submissions of Input Credit payment details, vide his letter dated 11.07.2020, the Respondent had submitted that “Acknowledgement copies of all home buyers to whom the benefit of ITC passed on by HCBS” would take time of not less than next 3-6 months.

b. That the Respondent had received more than 85 acknowledgements from customers.

c. That the Respondent did not agree with the Report dated 30.09.2020 as he had adjusted the benefits passed on to the customers. He had explained the same to all such customers who had come to take no-dues and possession. All such passed on GST benefits were documented and any such Customer denying benefit was either unaware of the same or not making correct submissions.

e. That if this Authority directed him to submit acknowledgements from any random customers, he was ready to submit the same.

f. The Respondent requested to allow him to prove his claim of passing on benefit to all those denying receipt of benefit and in case any one is left out, the chances of which are highly improbable, he was duty bound to pass on.

g. That those denying would be such customers who had not paid full dues and taken possession letters despite of repeated reminders and even in such cases he had reduced their total liability with passed on GST benefit.

h. That many customers had not come and taken their possession letter due to worsening Covid-19 situation. Once they came, he would be able ‘to have all acknowledgements and submit accordingly.

7. The Respondent vide his supplementary/additional submissions dated 14.12.2020 has stated:-

a. That ITC benefit of Rs. 1,42,56,347/- had already been passed on to 762 customers/ home/shop buyers, the list of customers/ home/shop buyers and ITC benefit claimed to have been passed on to each of them was furnished.

b. That he had received more than 85 acknowledgements from customers that he would like to bring to his records and attached sample copies of acknowledgements with his submissions.

c. The Respondent further reiterated his submissions made via letter dated 24.11.2020 and stated that he was ready to submit the acknowledgements from any random sample of buyers as evidence of passing on of ITC benefit.

8. Clarifications were sought from the DGAP on the Respondent’s submissions dated 24.11.2020 and 14.12.2020. The DGAP vide his Report dated 11.01.2021 has stated that the Respondent had submitted email addresses of 32 home buyers. Emails had been sent to these 32 home buyers to confirm the receipt of the benefit. Further, the DGAP stated that he had written letter and email to the Respondent to submit the email addresses of rest of the home buyers and the verification report would be submitted once the reply from the home buyers was received.

9. The Respondent was directed to file his consolidated written submission against the Report of the DGAP. Therefore, the Respondent vide letter dated 24.01.2021 had reiterated his submissions dated 24.11.2020 and 14.12.2020 and further submitted:-

a. That this Authority had taken a stand in various cases including the case of M/s Pivotal Infrastructure Pvt. Ltd., wherein the Authority had accepted the claim of the Respondent that he had passed on the benefit of ITC to his home buyers on the basis of random sample of 10% of the total buyers selected by this Authority and the acknowledgements received from the said selected buyers.

b. That he was ready to furnish the acknowledgements from randomly selected sample of buyers as evidence of passing on of ITC benefit as per the requirement of this Authority. Therefore, the Respondent further requested to select the random sample of buyers as per precedence and give him a chance to submit the acknowledgements/receipts from those selected buyers.

10. In view of the above request of the Respondent, the DGAP was directed to verify the claim of the Respondent that he had passed on ITC benefit in respect of 71 specified customers/ home/shop buyers selected randomly from the total 762 .

11. The DGAP vide letter dated 01.03.2021 has submitted his interim verification Report stating that:-

a. Out of the list of 71 home buyers, 3 names had been repeated. Of the remaining home buyers, email addresses of 39 home buyers were not available. Vide email dated 04.02.2021, the Respondent was requested to provide email addresses of those 39 home buyers. The Respondent, vide his email dated 12.02.2021, provided email addresses of 25 home buyers and also stated that out of the 39 home buyers, 3 had already withdrawn their applications for flats and the email addresses of 11 buyers were being obtained.

b. Out of 71 home buyers listed by this Authority replies were required from 65 home buyers, as three names had been repeated and three home buyers withdrew their applications. Out of the 65 home buyers, 32 home buyers had replied. Further, in response to previous emails of the DGAP to the home buyers as per its report dated 11.01.2021, 30 other home buyers not figuring in this Authority’s list, had submitted their responses out of which most of the homebuyers have replied in negative. The replies of the 62 home buyers were enclosed with the above letter.

12. The DGAP vide his supplementary verification reports dated 11.04.2022 and 02.05.2022 has stated that-

a. Further email letters dated 31.03.2022 were sent to 26 homebuyers again wherein 04 homebuyers have replied. Further, vide email letter dated 05.04.2022 the DGAP had requested the Respondent to provide the email address of remaining 07 homebuyers. Vide email letter dated 06.03.2022 the Respondent submitted that the email address of 04 home buyers and stated that email address of 03 home buyers are not available with him.

b. The DGAP vide email letters dated 06.04.2022 requested these 04 home buyers for confirmation of the benefit of ITC passed on as claimed by the Respondent, but none of the home buyers has replied till date. Therefore, out of the said 62 home buyers, 26 home buyers have not replied till date.

13. The proceedings in the matter could not be completed by the Authority due to lack of required quorum of members in the Authority during the period 29.04.2021 till 23.02.2022, and that the minimum quorum was restored only w.e.f. 23.02.2022 and hence the matter was taken up for further proceedings vide Order dated 21.03.2022 and hearing in the matter through Video Conferencing was scheduled to be held on 11.04.2022.

14. The Respondent vide his email dated 08.04.2022 has filed his rejoinder on the DGAP’s verification report dated 01.03.2022, wherein, the Respondent stated:-

a. That he re-iterates his earlier submissions made vide his letter dated 24.01.2021 that he had already passed the benefit of ITC of Rs. 1,42,56347/- to his flat buyers/customers.

b. That he was in receipt of the DGAP’s verification Report dated 01.03.2021, wherein two lists of home buyers of Respondent had been attached. The first list contained the names of 32 homebuyers out of 71 home buyers randomly selected by this Authority. All these 32 home buyers had stated and accepted that they had received the benefit of GST from the Respondent as was evident and clear from last column of the said list of 32 home buyers. This list substantiated that contention of the Respondent that he had passed the benefit of GST to all his home buyers.

c. a That regarding second list of 30 names of home buyers who were not in the list of 71 home buyers selected by this Authority but responded as per previous e-mails of _the DGAP, the Respondent submitted that he has credited the GST benefit in the account/ledger of each such buyers maintained by the Respondent. Copies of account/ledgers of all the 30 home buyers were enclosed with these submissions. From a perusal of all these ledgers of 30 home buyers, it was clear that the Respondent had credited the GST benefit to all these buyers also in their accounts maintained by the Respondent. Accordingly, the GST benefit to all these 30 buyers will be adjusted against their liability and if the liability had already been discharged by some buyers the GST benefit would be refunded to such homebuyers. In case of six home buyers such GST benefit had already been refunded by way of cheques as was evident from the ledgers of theses home buyers.

d. That the Respondent prayed to this Authority to hold that the Respondent had passed the GST benefit to each of his home buyers and accordingly the proceedings against the respondent in the present case might be dropped.

15. Further hearing in the matter was held on 11.04.2022. Same was attended by Shri Sandeep Chaudhary, Advocate, Shri Parveen Hooda and Shri Sourabh Singh, General Managers, Administration for the Respondent and Shri Lal Bahadur, Assistant Commissioner for the DGAP. Applicant No. 1 did not appear for the hearing. During the personal hearing the Respondent was heard. The Respondent has re-iterated his arguments based on his written submissions dated 24.11.2020, 14.12.2020, 25.01.2021 and 01.03.2021. Further, the Respondent during the personal hearing has requested time till 18.04.2022 to file his consolidated written submissions against the Report of the DGAP,

16. Further, the Respondent vide his email dated 18.04.2022 has filed his written submissions against the Report of the DGAP post hearing, wherein he has submitted the list of complete 762 customers with details of excess GST refunded or adjusted in their accounts. The Respondent further submitted the ledger accounts of only first 24 customers as per list provided along with these submissions and the Respondent further requested time for compilation and sharing of the complete ledger accounts and offer of possession. Therefore, the Respondent vide his email dated 05.05.2022 submitted the ledger accounts of the remaining home buyers as per the list mentioned above.

17. Next hearing in the matter was held on 10.06.2022. Same was attended by Shri Bhanja Kishore Pradhan, Applicant No. 1, Shri Sandeep Chaudhary, Advocate, Shri Parveen Hooda, General Manager, Administration for the Respondent and Shri Lal Bahadur, Assistant Commissioner for the DGAP. During the personal hearing the Applicant No. 1 and the Respondent were heard. The Respondent has re-iterated his arguments based on his written submissions dated 24.11.2020, 14.12.2020, 25.01.2021, 01.03.2021 and 18.04.2022.

18. We have carefully considered the Reports filed by the DGAP, all the submissions and the documents placed on record, and the arguments advanced by the Respondent.

19. We find that Section 171 (1) of the CGST Act, 2017 deals with two situations:- One relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP’s Report that there has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue it has been revealed from the DGAP’s Report that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 2.34% and during the post-GST period (July-2017 to December-2018), it was 5.65% for the project ‘Sports Ville’. This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 3.31% (5.65% – 2.34%) of his turnover for the project ‘Sports Ville’ and the same was required to be passed on to the customers/ home/shop buyers. The DGAP has calculated the amount of ITC benefit to be passed on to all the flat buyers as Rs. 1,42,45,741/- for the project “Sports Ville’ which was availed by the Respondent.

20. The Respondent has not disputed the findings of the DGAP regarding method of computation of profiteering and the amount worked out by him. As such, the Authority finds no reason to differ from the above-detailed computation of profiteering in the DGAP’s Report or the methodology adopted and hence, the Authority determines the profiteered amount for the period from 01.07.2017 to 31.12.2018, in the instant case, as Rs. 1,42,45,741/-, for the project ‘Sports Ville’.

21. 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 customers/ home/shop buyers commensurate with the benefit of ITC received by him as has been detailed above.

22. The Respondent is required to pass on/return such amount profiteered by him along with interest as prescribed under Rule 133(3)(c) of the CGST Rules, 2017, to the eligible customers/ home/shop buyers, including the Applicant No. 1 .

23. The Respondent has filed his various written submissions vide which he had submitted that he has passed benefit of ITC of Rs. 1,42,56,347/- to his customers/ home/shop buyers. The Respondent has further contended that he did not agree with the Report dated 30.09.2020 as he had adjusted the benefits passed on to the customers and from their dues.

24. In this regard, the Authority finds that the verification carried out by the DGAP regarding the claim of the Respondent for passing the benefit of ITC to his home/flat buyers is not conclusive as out of the said 62 home buyers as mentioned at para 17, to whom the emails were sent by the DGAP to verify whether the benefit of ITC claimed to have been passed on by the Respondent, 26 home buyers have not replied till date. Further, in response to previous emails of the DGAP to the customers/ home/shop buyers as per its supplementary report dated 11.01.2021, 30 other customers/ home/shop buyers not figuring in this Authority’s list for randomisation, had submitted their responses out of which most of the customers/ home/shop buyers have replied in negative i.e. had claimed that they had not received any amount from the Respondent. The Authority finds that verification by means of email is not conclusive proof of passing of the benefits. The email can be created/generated by any person, which may or may not belong to the home buyer. The Authority finds that the conclusive proof of passing the benefits are only through accounts like credit note, refund of amount as reflected in bank account or reduction in price as reflected in invoice. Since no such evidence has been produced by the Respondent his claim of having passed on the benefit is not tenable and hence it cannot be accepted.

25. The complete list of eligible customers/ home/shop buyers along with Unit number and the profiteered amount due to be returned/passed on/ refunded to each of them is annexed as Annexure ‘A’ to this Order.

26. Therefore, the Authority directs the concerned jurisdictional CGST/SGST Commissioner to ensure that such amounts are returned/passed on/ refunded along with interest as prescribed under Rule 133(3)(c) of the CGST Rules, 2017 to each customers/ home/shop buyers by the Respondent, if not already paid. As observed by the Authority, the conclusive proof of passing benefits and its method is discussed in the earlier paragraphs.

27. The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 1,42,45,741/-, for the project ‘Sports Ville’. Hence the Respondent is directed to also pass on interest @18% to the customers/ home/shop buyers on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ return/refund, as prescribed under Rule 133 (3) (b) of the CGST Rules 2017.

28. We also order that the profiteering amount of Rs. 1,42,45,741/- for the project ‘Sports Ville’ along with the interest @ 18% from the date of receiving of advance from the customers/ home/shop buyers till the date of passing the benefit of ITC shall be paid/passed on by the Respondent within a period of 3 months from the date of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017.

29. It is evident from the above narration of facts that Respondent has denied the benefit of ITC to the customers/ home/shop buyers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for imposition of penalty under the provisions of the above Section.

However, since the provisions of Section 171 (3A) have come into force w.e.f. 01.01.2020, whereas, the period during which violation has occurred is w.e.f. 01.07.2017 to 31.12.2018, hence the penalty prescribed under the above Section cannot be imposed on Respondent retrospectively.

30. The concerned jurisdictional CGST/SGST Commissioner is directed to ensure compliance of this Order. It may be ensured that the benefit of ITC is passed on to each customer/ home/shop buyer as per Annexure- A attached with this Order along with interest @18%, as prescribed under Rule 133 (3) (b) of the CGST Rules 2017, if not paid already. In this regard an advertisement of appropriate size to be visible to the public may also be published in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent) — M/s HOBS Promoters & Developers Pvt. Ltd., Project- ‘Sports Ville’, Location-Gurgaon, Haryana and amount of profiteering of Rs. 1,42,45,741/- so that the concerned homebuyers can claim the benefit of ITC if not passed on. Customers/ home/shop buyers may also be informed that the detailed NAA Order is available on Authority’s website www.naa.gov.in. Contact details of concerned Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement. A copy of the advertisement should also be sent to this office.

31. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this order to this Authority and the DGAP within a period of 4 months from the date of receipt of this order.

32. Further, the Hon’ble Supreme Court, vide its Order dated 23.03.2020 in Suo Moto Writ Petition (C) no. 3/2020, while taking suo-moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) including those prescribed under Rule 133(1) of the CGST Rules, 2017, as is clear from the said Order which states as follows:-

“A period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w. e. f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.”

Further, the Hon’ble Supreme Court, vide its subsequent Order dated 10.01.2022 has extended the period(s) of limitation till 28.02.2022 and the relevant portion of the said Order is as follows:-

“The Order dated 23.03.2020 is restored and in continuation of the subsequent Orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general of special laws in respect of all judicial or quasi-judicial proceedings.”

Accordingly this Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.

33. A copy of this order be sent, free of cost to, the Applicants, the DGAP, the Respondent, Commissioners CGST/SGST Haryana, the Principal Secretary (Town and Country Planning), Government of Haryana as well as Haryana RERA for necessary action. File to be consigned after completion.