Case Law Details
Sh. Sumit Mansingka Vs E-Homes Infrastructure Pvt. Ltd. (NAA)
The Respondent E-Homes Infrastructure Pvt. Ltd. has made his detailed submissions regarding the fact that the credit of VAT for pre-GST era has been denied to him. He has also submitted copies of VAT returns and the UPVAT assessment orders for the relevant period in this regard. The perusal of the UP VAT assessment orders appears to indicate that the credit of the VAT for the relevant period has been allowed by the assessing authority in terms of state laws, prevalent at the time. It is claimed by the Respondent that assessment orders indicate that the Respondent had been collecting the VAT from his customers for the year 2013-14 to June 2017 on pro-rata basis and was also depositing the same in accordance with the extant rules. We find that, this documentary evidence in the form of VAT assessment orders passed by the competent authority needs to be carefully considered. Having gone through the clarifications of the DGAP, we find that they have not looked into the evidence on record inasmuch as the invoices submitted by the applicant along with the application itself appear to indicate that the VAT amount has been separately demanded by the Respondent in the pre-GST invoices. It would appear from such invoices that the Respondent had been charging VAT amounts from his homebuyers/recepients in the pre-GST period. We also find that certain orders of this authority have been cited by the DGAP in support of his finding that the credit of ITC paid on the purchase of inputs merits to be excluded from the computation of the profiteered amount. These orders are Order Number 38/2020, 31/2020, 8/2020 and 75/2019. We find that while it may be true that in these cases the Authority has held that the benefit of credit of VAT shall not be available to the respondents in those cases. However, the facts of the individual case has to be looked into while deciding the matter. We find that the Assessment Orders of UPVAT for the period from April 2016 to June 2017 issued by the statutory VAT Authorities in respect of the Respondent have either never been placed before the DGAP during the course of the investigation or no evidence was provided by the Respondent to suggest that VAT has been charged from their customers and hence the same has not been incorporated in the computation of profiteered amount. The Authority further finds that the ITC of VAT, as much as is allowed vide the said VAT Assessment Orders for the period from April 2016 to June 2017 (copies enclosed as Annexure I and II) shall be incorporated into the computation of profiteered amount by the DGAP subject to verification of the authenticity of the same. The Authority therefore directs the DGAP to ascertain the authenticity of the VAT Assessment Orders submitted by the Respondent for the period from April 2016 to June 2017 and if verified from the State GST Commissioner/Uttar Pradesh VAT Department, the DGAP shall incorporate the amounts, as allowed by the concerned statutory Authority on assessment, in the computation of profiteered amount by including the same as ITC in the pre GST period and recalculate the profiteered amount and submit his Report to this Authority.
28. The Respondent has also submitted that while computing the ratio of ITC to turnover for Project- 1 i.e. Phase I, for the post-GST period, DGAP had failed to consider the reversal ITC of GST amounting to Rs. 72,68,049.00 although the supporting challans and Form DRC -03 had been submitted. In this regard, we observe that the DGAP has also reported in its Report dated 19.02.2021 that the supporting documents that were needed to ascertain the nature of the reversal (whether it was the ineligible credit that was reversed or the credit that pertained to unsold flats) submitted by the Respondent was received only after the reinvestigation Report had already been finalized due to the time-bound nature of the same. We also observe that the Respondent has stated that although the reversals were made duly and promptly, the delay in submission of the same before the DGAP was due to the epidemic that had forced the closure of his office. Given the above, in the interest of justice, we observe that the documents submitted by the Respondent detailing the nature of the GST ITC that was reversed ought to be examined on merits and profiteering, if any, may be recalculated, if necessary, so that any reversal made on account of ineligibile ITC on account of incorrect GSTIN details as stated by the Respondent can be verified from the DRC 3 challans and their supporting documents which are already on record and available with the DGAP may be factored into the computation of profiteered amount in accordance with law and decisions of this Authority in similar cases, if any.
29. In the view of the above discussion and findings, this Authority directs the DGAP to recalculate the profiteered amount, in respect of Project-1 i.e Phase I, in line with paragraphs 27 and 28 of this Order under Rule 133(2A) of the CGST Act, 2017, and submit its report within four weeks of this Order.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
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