Maheshwari Infratech Pvt Ltd guilty of Profiteering in its project U-Faria: NAA

Vivek Gupta Vs Maheshwari Infratech Pvt Ltd (NAA)

NAA held that Maheshwari Infratech Pvt Ltd has denied the benefit of ITC to the customers/flat buyers/recipients in his Project U-Faria’ in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 01.07.2017 to 31.03.2019, therefore, penalty cannot be imposed on the Respondent retrospectively, i.e. for the period of investigation.

FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY

1. The Present Report dated 29.10.2020 had been furnished by the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 133(4) of the Central Goods & Services Tax (CGST) Rules, 2017, in the case of M/s Maheshwari Infratech Pvt Ltd., A-6, Ground Floor, Yojna Vihar, Delhi-110092, in response to the Authority’s JO No. 16/2020 dated 20.04.2020 wherein the DGAP’s Report dated 24.09.2019 was referred back to reinvestigate the case under Rule 133(4) of the Central Goods and Service Tax Rules, 2017 and directed the DGAP to further investigate the present case on the following issues:

i) Whether the ITC amounting to Rs. 1,77,50,478/- had been blocked by the State GST authorities on 28.03.2019.

ii) Whether the above amount of ITC should be taken in to account while computing the profiteered amount during the period from 01.07.2017 to 31.03.2019.

iii) Whether the Respondent had passed on the benefit of Rs. 9,61,130/- as ITC benefit to the shop buyers during the period from 01.07.2017 to 31.03.2019.

iv) Whether the Respondent had passed on an amount of Rs. 95,205/- as ITC benefit to the Applicant 1.

2. The DGAP vide report dated 24.09.2019 reported that an application dated 29.11.2018 was filed before the Standing Committee on Anti-profiteering, under Rule 128 (1) of the CGST Rules, 2017 by the Applicant No. 1 alleging profiteering in respect of construction service supplied by the Respondent. The above Applicant had submitted that he had purchased Shop No. G-122 in the Respondent’s commercial project “U FARIA”, situated at C-04A, Sector-16B, Greater Noida, Uttar Pradesh and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in price of the shop. The above application was examined by the Standing Committee on Anti-profiteering, in its meeting held on 11.03.2019, the minutes of which were received by the DGAP on 27.03.2019, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. Accordingly, it was decided by the DGAP to initiate an investigation and collect evidence necessary to determine whether the benefit of ITC had been passed on by the Respondent to the Applicant No. 1 in respect of the construction service supplied by the Respondent.

i. Thereafter, the DGAP had issued Notice to the Respondent on 08.04.2019 under Rule 129 (3) of the above Rules, calling upon him to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price 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 supporting documents. The Respondent vide the said Notice, was also given an opportunity to inspect the non-confidential evidence/information furnished by the Applicant No. 1 during the period from 10.04.2019 to 12.04.2019, which the Respondent did not avail of. The Applicant No. 1 vide e-mail dated 17.09.2019 was also afforded an opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 18.09.2019 or 19.09.2019, which the Applicant No. 1 also did not avail of. The DGAP has also stated that the period covered by the current investigation was from 01.07.2017 to 31.03.2019 and the time limit to complete the investigation was extended upto 26.09.2019 by this Authority, vide its order dated 19.06.2019, in terms of Rule 129 (6) of the above Rules.

ii. The DGAP informed that the Respondent has submitted a copy of the Project Report of the “U Faria” project and the payment schedule for the purchase of shops. The Respondent, vide his letter dated 29.05.2019 and subsequent letter, submitted copies of the demand letters issued to the Applicant No. 1. The details of the payment plan of the Applicant No. 1 to the Respondent are furnished in Table-A below:-

Table-`A’

iii. The DGAP also intimated that Para 5 of Schedule-III of the CGST Act, 2017 (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) reads as “Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building”. Further, clause (b) of Para 5 of Schedule-II of the CGST Act, 2017 reads as “(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after his first occupation, whichever was earlier”. Thus, the DGAP has submitted that the ITC pertaining to the commercial shops which were under construction but not sold was provisional ITC which would be required to be reversed by the Respondent, if such shops remained unsold at the time of issue of the Completion Certificate (CC), in terms of Section 17 (2) & Section 17 (3) of the CGST Act, 2017, which read as under:-

“Section 17 (2) Where the goods or services or both were used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as was attributable to the said taxable supplies including zero-rated supplies.

Section 17 (3) “The value of exempt supply under sub-section (2) shall be such as may be prescribed and shall include supplies on which the recipient was liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.”

Therefore, the DGAP claimed that the ITC pertaining to the unsold units would not fall within the ambit of this investigation and the Respondent was required to recalibrate the selling prices of his shops to be sold to the prospective buyers by considering the proportionate benefit of additional ITC available to him post-GST.

iv. The DGAP also reported that the submissions of the Respondent in respect of the turnover have been examined and during the investigation, the turnover has been considered from the Home Buyers list submitted by the Respondent. The Respondent has also contended that the ITC utilized post-GST should be considered for calculation of profiteering. The DGAP has observed that in all the investigations done in such cases, the figure of ITC availed was taken and not the ITC utilized. Further, the unutilized credit out of availed, would be utilized in future to set off the tax liability by the Respondent.

v. The DGAP further reported that prior to 01.07.2017 i.e. before the GST was introduced, the Respondent was eligible to avail credit of Service Tax paid on the input services but credit of CENVAT on Central Excise Duty was not available in respect of the commercial shops sold by him. The Respondent was also not eligible to avail ITC of VAT paid on the inputs. However, post-GST, the Respondent could avail ITC of GST paid on all the inputs and input services. The DGAP has analysed, from the data submitted by the Respondent, covering the period from April, 2016 to March, 2019, the details of the ITC availed by him, his turnover from the project “U Faria” and computed the ratio of ITC to turnover, during the pre-GST period from April, 2016 to June, 2017 and post-GST period from July, 2017 to March, 2019, which has been furnished by him in the Table-B below:-

Table-`B’

(Amount in Rs.)

vi. The DGAP claimed from the Table-13′ that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period from April, 2016 to June, 2017 was 0.84% and during the post-GST period from July, 2017 to March, 2019, it was 2.58% which clearly confirmed that post-GST, the Respondent had benefited from additional ITC to the tune of 1.74% [2.58% (-) 0.84%] of the turnover.

vii. The DGAP also observed that the Central Government, on the recommendation of the GST Council, had levied 18% GST (effective rate was 12% in view of 1/3rd abatement for land value) on construction service, vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The effective GST rate was 12% for commercial shops. Accordingly, on the basis of the figures contained in Table- ’13’ above, the comparative figures of the ratio of ITC availed/available to the turnover in the pre-GST and post-GST periods as well as the turnover, the recalibrated base prices and the excess realization (profiteering) during the post-GST period, has been tabulated in Table-‘C’ below by the DGAP:-

Table-‘C’ 

(Amount in Rs.)

viii. The DGAP claimed from the Table-‘C’ that the additional ITC of 1.74% of the turnover should have resulted in commensurate reduction in the base prices as well as cum-tax prices. Therefore, in terms of Section 171 of the CGST Act, 2017, the benefit of such additional ITC was required to be passed on to the recipients.

ix. The DGAP also claimed that from the above calculation explained in Table-C, on the basis of the aforesaid CENVAT/ITC availability pre and post-GST and the details of the amount collected by the Respondent from the Applicant No. 1 and other shop buyers in respect of the commercial shops sold by the Respondent, during the period from 01.07.2017 to 31.03.2019, the benefit of ITC that needed to be passed on by the Respondent to the buyers of commercial shops came to Rs. 24,78,383/- which included 12% GST on the base amount of Rs. 22,12,842/-. The commercial shop buyer and unit no. wise break-up of this amount has been given in Annexure-14 by the DGAP. This amount was inclusive of the profiteered amount of Rs. 37,107/- in respect of the Applicant No. 1. The DGAP also intimated that on the basis of the details of the outward supplies of the construction service submitted by the Respondent, it was observed that the service has been supplied in the State of Uttar Pradesh only.

x. The DGAP submitted that the benefit of additional ITC of 1.74% of the taxable turnover which has accrued to the Respondent was required to be passed on to the Applicant No. 1 and the other recipients. He has further submitted that the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent inasmuch as the additional benefit of ITC @1.74% of the base prices received by him during the period from 01.07.2017 to 31.03.2019, has not been passed on to the Applicant No. 1 and the other recipients. On this account, the Respondent has realized an additional amount to the tune of Rs. 37,107/- (including GST) from the Applicant No. 1 which included both the profiteered amount @1.74% of the basic price and GST on the said profiteered amount. The DGAP has also contended that the Respondent has realized an additional amount of Rs. 24,41,276/-, as has been mentioned in Annexure-14, which included both the profiteered amount @1.74% of the basic prices and the GST on the said profiteered amount, from 177 other recipients who were not Applicants in the present proceedings. These recipients were identifiable as the Respondent has provided their names and addresses along with unit nos. allotted to them. Therefore, this additional amount of Rs. 24,41,276/- was required to be returned to such eligible recipients. The DGAP has also intimated that the present investigation has covered the period from 01.07.2017 to 31.03.2019 and profiteering, if any, for the period post March, 2019, has not been examined as the exact quantum of ITC that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed.

3. The matter was examined by the Authority and vide I.O. No. 16/2020 dated 20.04.2020, directed the DGAP to further investigation in the said matter on the points as mentioned above. Therefore, the DGAP vide Report dated 29.10.2020 has stated that:-

a. The time limit to complete the investigation was upto 19.07.2020, as per Rule 129(6) of the CGST Rules. However, in light of Covid-19 pandemic, the investigation could not be completed on or before the above dates due to force majeure. Accordingly, this Report was being furnished in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020, as amended vide Notification No. 55/2020 dated 27.06.2020 and 65/2020-Central Tax dated 01.09.2020, issued by the CBIC. As per which, the last date for submission of Report had been extended upto 30.11.2020.

b. On receipt of the aforesaid order from the NAA on 14.05.2020, a letter dated 26.05.2020 and further letter/email dated 30.06.2020 and 06.10.2020 were issued to the Respondent calling for the details of documentary evidence amounting to Rs. 1,77,50,478/- claimed to be blocked by the State GST authorities; details and documentary evidence of passing on of the benefit of ITC to the shop buyers including Applicant No. 1; and contact details (email address) of all shop buyers, for verification of amount of benefit of ITC passed on by the Respondent.

c. The Respondent submitted his reply dated 02.06.2020, 09.07.2020 and 09.10.2020. The Respondent submitted the electronic credit ledger for the period 01.07.2017 to 31.03.2019 evidencing blockage of ITC of Rs. 1.77 Cr. by State Authorities and copies of Credit notes issued to shop buyers, for passing on of ITC benefit to shop buyers. The Respondent vide above mentioned replies submitted that the State Authorities had blocked the ITC, without informing the reasons, therefore, he cannot state the reasons for the same and that there was no actual working of passing on of ITC to buyers, he had extended benefit of ITC @3% on a broader principle.

d. As per the directions of NAA vide I.O. No. 16/2020 dated 20.04.2020, letter dated 21.07.2020 and further reminders dated 17.08.2020 and 14.09.2020 were written to the Deputy/ Assistant Commissioner, Sales Tax Office, Suraipur, Greater Noida, to provide the reasons of blocking the said ITC and present status of the case. Also, it was requested to provide the copies of GSTR-1 & GSTR-3B and Electronic Credit Ledger for the period April, 2019 to March, 2020, to verify the present status of blocked ITC, as if the same was available in the Ledger or not. Also, letter dated 21.07.2020 and further reminders dated 17.08.2020 and 14.09.2020, were written to the Additional Director General, Directorate General of Systems, Chennai to provide the copies of statutory returns for the above mentioned period.

e. The Deputy Commissioner, SGST, Gautam Budh Nagar, Uttar Pradesh vide letter dated 07.10.2020 and email dated 17.10.2020 stated that a letter F. No. 22011/NAA/26/2018 Vol-2 dated 18.12.2018 had been received from the Secretary to Authority in the Commercial Taxes, Headquarters Office. On receipt of the above mentioned letter, the Respondent was asked to make the documents available to verify the ITC. The Respondent didn’t comply with the request of verification therefore, the ITC was blocked by the authorities. However, in absence of any adverse Report in the previous one year period, ITC had been unblocked on 08.10.2020, as per provisions of Rules 86(A) of the CGST Rules, 2017.

f. Also, the Respondent had not accepted the illegality of said ITC at any stage of investigation. Therefore, the contended ITC was legally available to the Respondent and hence, the same could be utilized, once unblocked, as in the present case. Further, the period of investigation was from 01.07.2017 to 31.03.2019. The credit was blocked by concerned jurisdictional SGST authorities provisionally on 28.03.2019 only for non­compliance of provisions. This credit was practically available for utilization to the Respondent , practically for the entire period under investigation. Therefore, the claim of the Respondent to exclude the ITC of Rs. 1.77 Crores from the profiteering computation was not acceptable. Thus, the Respondent had benefitted from the additional ITC, which was required to be passed on to the shop buyers.

g. The Respondent had submitted copies of Credit notes issued to his 90 shop buyers alongwith summary of the same. The total amount of benefit that was claimed to be passed on by the Respondent was Rs. 9,61,130/-, including the Applicant No. 1.

h. To substantiate the Respondent’s claim of passing on of benefit, email dated 08.10.2020, 09.10.2020 and 12.10.2020 were sent to the Applicant No. 1 and 55 other shop buyers, randomly selected, to confirm the amount of benefit received from the Respondent. The Applicant No. 1 vide email dated 15.10.2020 submitted that he had received the total benefit of Rs. 1,95,915 (Rs. 37,107 as per Annexure) as an ITC benefit, from the Respondent. In response to the other 55 emails, which was more than 60% of 90 shop buyers (to whom the benefit was claimed to be passed on), only 09 shop buyers (i.e. 16.36% of sent) responded. Out of these 09 shop buyers, 05 had confirmed the amount of benefit (totaling to Rs. 26,515/-) received from the Respondent, while the other 04 had denied receipt of any benefit. Further, it was observed from the above replies that, the Applicant No. 1 alone received higher amount as ITC benefit then the total amount of other 05 shop buyers. On the basis of mixed replies submitted by the above shop buyers, the issue of passing on of the proper of ITC benefit cannot be confirmed.

i. From the above discussions, it might be seen that the benefit of additional ITC to the tune of Rs. 24,14,761/- (Rs. 24,78,383 (-) Rs. 37,107/­(-) Rs. 26,515/-), cannot be verified with the Respondent’s submissions. Therefore, the total benefit of ITC of Rs. 24,14,761/- which included GST (g_., 12%) on the base amount was required to be passed on to the shop buyers.

j. The SGST authorities had unblocked the ITC amounting to Rs. 1,77,50,478 and thus, the same had been taken into account while computing the profiteered amount during the period from 01.07.2017 to 31.03.2019. This was part of the additional benefit of ITC and was required to be passed on to the shop-buyers. Also, the Respondent’s claim of passing on of the benefit of ITC to the Applicant No. 1 was verified but to his other shop buyers was not verified, and therefore, cannot be accepted. Thus, the profiteering amount of Rs. 24,14,761/-was required to be returned to eligible recipients.

4. The above Report was carefully considered by this Authority and a Notice dated 06.11.2020 was issued to the Respondent to explain why the Report dated 29.10.2020 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 had been filed vide letter dated 04.12.2020 and 24.06.2021 wherein the Respondent had submitted that :-

a) During the period July 2017 to Mar 2019, ITC of Rs 1.77 Crores was lying blocked and once any ITC was blocked, it could not be considered for profiteering at all. During the said period it could not be said that the said ITC was available to the Respondent .The assertion made by DGAP that such credit ‘was’ available or ‘is’ available to the Respondent was absolutely erroneous when it had been blocked during the very period. The whole formula of profiteering was based on the availability of ITC. Once the ITC itself was not available how it could be used for calculation of profiteering. When it was known during the period that certain ITC had been blocked by the Govt Agency, it could not be referred as ITC benefit. It appears to be a misleading statement. Unblocking of ITC by the SGST department at that stage was irrelevant, as he might not be able to use that ITC at all and even otherwise that could at best be made part of ITC in the current regime. Therefore, requested that the profiteering be calculated again as the company never availed or utilised the amount of Rs 1.77 Crores blocked by the department during the said period.

b) The confirmations taken by the DGAP was malafide and erroneous. It could be noted that various customers had confirmed the passing on the credit. The Respondent had already passed on the credit to all the customers mentioned in the list. There should be no doubt in passing on of the ITC benefit when certain customers had confirmed. The customers denying passing on of the ITC benefit might not be, aware of such discount. The Respondent had rather passed on more benefit to the customers. The Respondent had passed on the ITC benefit of Rs 9.61 lacs to the buyers.

5. Copy of the above submissions dated 04.12.2020 filed by the Respondent was supplied to the DGAP for supplementary Report under Rule 133(2A) of the CGST Rules, 2017. The DGAP filed his clarifications vide supplementary report dated 11.02.2021 wherein clarified that:-

i. The contention of the Respondent was incorrect, as the ITC of Rs, 1.77 Crores was blocked from 28.03.2019 only. The investigation period was from 01.07.2017 to 31.03.2019 only. Thus, the ITC was effectively blocked for merely 3 days during the investigation period. Profiteering had been calculated on the basis of statutory documents and reply submitted by the Respondent with respect to availability of ITC. The Respondent cannot take a plea that since the credit was blocked for some period, he should not pass on the benefit, as the credit was not denied but merely blocked for temporary period. That ITC was always available in his Electronic Credit Ledger for using the same towards his tax liability. That did not deter the Respondent in issuing demand letters by giving the commensurate benefit of ITC as per Section 171 of the CGST Act, 2017.The SGST authorities had already unblocked the ITC on 08.10.2020, which was available to the Respondent for utilization.

ii. At the time of the investigation, 55 emails were sent to the shop buyers for verification of passing on of the benefit of ITC and mixed responses from the shop buyers were received. Out of 55, only 09 shop buyers responded. Out of 09, 05 shop buyers confirmed the receipt of amount and 04 had denied. Thus, it could not be confirmed that commensurate benefit to all recipients had been passed on.

6. The proceedings in the matter could not be completed by this 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 proceedings vide Order dated 24.02.2022 and the Respondent as well as the Applicants were given an opportunity to be heard in person via video conferencing on 29.03.2022. However, the respondent vide letter dated 28.03.2022 requested for adjournment. The next date of hearing was scheduled to be held on 29.04.2022 via video conferencing. However, the respondent vide his email dated 29.04.2022 requested to decide the matter on merits. No one appeared on behalf of the Applicant. The hearing was closed vide order sheet dated 02.05.2022.

7. The Authority has carefully considered the Reports filed by the DGAP, all the submissions and the documents placed on record, and the contentions raised by the Respondent vide his written submissions. It is clear from the plain reading of Section 171(1) that it 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 whether there was any net benefit of ITC with the introduction of GST. It is observed from the 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 0.84%, whereas, during the post-GST period (July 2017 to March, 2019), it was 2.58% for the project `U-FARIA’. This confirms that post-GST, the Respondent has benefited from additional ITC to the tune of 1.74% (2.58% – 0.84%) of his turnover for the project `U-FARIA’ and the same was required to be passed on to the customers/shop buyers/recipients. The DGAP had calculated the total profiteering amount as Rs. 24,78,383/- in respect of 90 shop buyers including the Applicant No. 1.

8. The Respondent has raised several contentions in the matter and the findings of the Authority are as under:-

a) The Respondent has raised a contention that DGAP has exceeded his jurisdiction by calculating profiteering in respect of the customers other than the Applicant No.1.

In this regard, the Authority notes that, in terms of Section 171(1) of the CGST Act, 2017, it is mandated that, “Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices^–. Thus the legal requirement is abundantly clear that in the event of a benefit of ITC or reduction in rate of tax, there must be a commensurate reduction in prices of the any supply of goods or services. The said provision provides for ‘any supply’, which expend the scope to cover all supplies; where tax reduction or ITC benefit has not been passed on.

Therefore, the law prescribes that benefit of reduction in rate of tax or benefit of increase in ITC, in relation to any supply of goods or services should result in commensurate reduction in prices of such supply and accordingly, the DGAP was justified in examining all the supply made by the Respondent beyond the Application filed by the Applicant No. 1.

b) The Respondent has raised a contention that the provisions of Section 171 were already under challenge before the Hon’ble High Court of Delhi on which stay has been granted.

In this regard, the Authority finds that no stay has been granted by the Hon’ble High Court of Delhi on the provisions of Section 171 of the CGST Act, 2017. The issue contained in the instant matter is being decided on merit on the given facts and position of law existing today.

c) The Respondent has contended that the fresh negotiations/bookings on or after 01.07.2017 shall be excluded from the calculation of the profiteering amount.

The Authority finds that, there is no evidence on record that, from 1.07.2017 onwards i.e. after the introduction of GST and availability of additional ITC, the Respondent has decreased the price of the units to be sold by him commensurate with such availability of additional ITC as mandated by Section 171 of the CGST Act, 2017. Hence, such submission made by the Respondent is untenable. The Respondent has benefitted with additional ITC only after the introduction of the GST. This additional benefit of ITC pertains to the entire project or in other words, relates to each shop/unit of the project of the Respondent. Hence all unit/shop buyers are eligible to get their due benefit of ITC from the Respondent irrespective of their bookings made in pre-GST or post-GST period.

d) The Respondent has raised a contention that instead of the value of relevant ITC availed post GST for the purpose of calculation of profiteering, the ITC utilized post GST should be considered.

In this regard, the Authority finds that the contended ITC is legally available to the Respondent and hence, the same can be utilized as in the present case. The Respondent has benefited from the additional ITC, which was required to be passed on to the shop buyers. As regards to contention of the Respondent regarding blockage of the ITC by the State GST authority, the Authority find that contention/reply of DGAP is acceptable in as much as the ITC was available to the Respondent during the period 1.07.2017 to 28.03.2019 and nothing prevented them from passing on the benefit of ITC. Further as replied by the DGAP, ITC can be passed on by any means i.e. credit notes, lowering of instalment, etc. It is also a fact that said amount of the ITC was unblocked later on. In the given facts, the contention of the Respondent cannot be accepted.

9. For the reasons mentioned herein above, the Authority finds no reason to differ from the computation of profiteering in the DGAP’s Report dated 24.09.2019 and 29.10.2020 or the methodology adopted. The Authority finds that the Respondent has profiteered by Rs. 24,78,383/- during the period of investigation i.e. 01.07.2017 to 31.03.2019. The Authority determines an amount of Rs. 24,78,383/- (including 12% GST) under section 133(1) as the profiteered amount by the Respondent from his 178 /shop buyers/customers (as per Annexure A to this Order), including Applicant No. 1, which shall be refunded by him along with interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment as per the provisions of Rule 133 (3) (b) of the GCST Rules 2017. The amount profiteered is Rs. 37,107/- (including GST) in respect of Applicant No. 1 .

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

11. The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 24,78,383/-, for the project T1- FARIA’. Hence the Respondent is directed to also pass on interest @18% to the customers/ Shop buyers/ recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ payment, as per provisions of Rule 133 (3) (b) of the CGST Rules, 2017.

12. The complete list of shop buyers/customers has been attached with this Order, with the details of the amount of benefit of ITC to be passed on along with interest @ 18% in respect of the project ‘U- FARIA’ of the Respondent as in the Annexure-`A’.

13. This Authority also orders that the profiteered amount of Rs. 24,78,383/- for the project `U- FARIA’ along with the interest @ 18% from the date of receiving of advance from the shopbuyer 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.

14. It is also evident from the above narration of facts that the Respondent has denied the benefit of ITC to the customers/flat buyers/recipients in his Project U-Faria’ in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 01.07.2017 to 31.03.2019, therefore, penalty cannot be imposed on the Respondent retrospectively, i.e. for the period of investigation.

15. The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC has been passed on to each shop buyer/customer as per this Order along with interest @,18%. In this regard an advertisement of appropriate size to be visible to the public at large may also be published in a minimum of two local newspapers/ vernacular press in Hindi/English/local language with the details i.e., Name of the builder (Respondent) — M/s Maheshwari Infratech Pvt. Ltd., Project- “U- FARIA”, Location- C-04A, Sector-16B, Greater Noida west, Uttar Pradesh and amount of profiteering Rs. 24,78,383/- so that the concerned shop buyers can claim the benefit of ITC if not passed on. Shop buyers/customers 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 who are nodal officers for compliance of the NAA’s order may also be advertised through the said advertisement.

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

17. Further, the DGAP is also directed to monitor the compliance of the order by the concerned jurisdictional CGST/SGST Commissioner.

18. The present investigation has been conducted up to 31.03.2019 only. However, the Respondent is liable to pass on the benefit of ITC which would become available to him till the date of issue of the Completion Certificate. Accordingly, the concerned jurisdictional Commissioner CGST/SGST is directed to ensure that the Respondent passes on the benefit of ITC to the eligible shop buyers/customers as per the methodology approved by this Authority in the present case and submit his report to this Authority through the DGAP.

The Applicants or any other interested party/person shall also be at liberty to file a complaint against the Respondent before the Uttar Pradesh State Screening Committee in case the remaining benefit of ITC is not passed on to them.

19. Further, since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects executed under the same GSTIN. The Authority has reasons to believe that the Respondent may have resorted to profiteering in the other projects also and hence, it directs the DGAP under Rule 133(5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of Section 171 of the CGST Act, 2017 and submit complete investigation report for all the Projects under this single GST Registration.

20. Further, the Hon’ble High Court of Delhi, vide its Order dated 10.02.2020in the case of Nestle India Ltd. & Anr. Vs. Union of India has held that :-

“We also observe that prima facie, it appers to us that the limitation of period of six months provided in Rule 133 of the CGST Rules, 2017within which the authority should make its order from the date of receipt of the report of the Directorate General of Anti Profiteering , appears to be directory in as much as no consequence of non-adherence of the said period of six months is prescribed either in the CGST Act or the rules framed thereunder.”

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

22. A copy of this order be sent to the Applicant No. 1, the Respondent, Commissioners CGST/SGST Greater Noida, the Principal Secretary (Town and Country Planning), Government of Uttar Pradesh as well as Uttar Pradesh RERA free of cost for necessary action.