Prabhat Kumar Vs Mascot Buildcon Pvt. Ltd. (NAA)
NAA held that apparent anomalies in the Reports of the DGAP need to be appropriately addressed by way of revisiting the investigation in the interest of justice. Since there are differences in the figures considered for computation of the profiteering amount, thorough verification of the figures is required while re-investigating the matter. Hence, without dwelling upon any other aspect of the case and without going into any contentions of the Respondents and the Applicants, this Authority, under the powers conferred on it vide Rule 133(4) of the CGST Rules read with Section 171 of the CGST Act 2017, directs the DGAP to reinvestigate this case and recompute the quantum of profiteering based on above findings. While reinvestigating the matter on the above lines, all other contentions made by Respondent before this Authority during the course of the hearings may also be considered.
The DGAP shall submit his Report after reinvestigation on the above lines expeditiously. The Respondents are directed to extend all necessary assistance to the DGAP and furnish him with necessary documents or information as required during the course of the investigation.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The Report dated 27.02.2019 and subsequent reports dated 16.04.2019, 10.05.2019, 17.07.2019. and 12.09.2019, had been received from the Director-General of Anti-Profiteering (DGAP) after an investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017.
2. After perusal of the submissions of DGAP, this Authority, had afforded numerous opportunities of hearing to Respondent No. 1 & the above Applicants between 27.03.2019 and 22.08.2019. During the course of hearings. Respondent No. 1, vide his submissions, had averred before this Authority that, in this project, there was a sharing of the floor area ratio between the landowner i.e. the Respondent No. 3, the facilitator i.e. the Respondent No. 2, and himself (Respondent No. 1).
3. Based on the above, this Authority had added M/s Home Town Properties Private Limited and Sh. Dharam Singh as Respondents in the matter (the Respondent No. 2 & 3 respectively).
4. Having considered the Report and various submissions of all the Respondents and the Applicants, we found that the contents of the submissions made by Respondents evidence that all the Respondents were stakeholders in the subject project holding 65%, 13% & 22% share in the sanctioned Floor Area Ratio (FAR) respectively and that these facts were not known to the DGAP at the time of investigation into the matter. It was also clear that only one of the three Respondents. i.e. Respondent No. 1, had availed the entire Input Tax Credit (ITC) and hence was required to pass on the commensurate benefit thereof to the recipients. It, therefore, made it clear to us that this matter, including its computations, needed to be revisited by the DGAP through a thorough investigation, keeping in view that the share of FAR pertaining to the Respondent No. 2 & 3 could not be equated to/ treated as unsold and hence, the entire computation of profiteering would stand modified. We were of the view that since the requisite information including the details of area sold and area unsold in the pre-GST and post-GST periods was now available, the said aspect also needed to be examined in depth. We also took note of the fact that Respondent No. 1, as also other Respondents and the Applicant, had submitted other details/information during the hearings held before this Authority, which needed to be considered afresh by the DGAP.
5. Given the above findings, this Authority had directed the DGAP to further investigate the matter under Rule 133(4) of the Central Goods & Service Tax Rules, 2017 and re-compute the amount of profiteering based on the documents/information available on record. The DGAP was also directed that he can solicit any other information/ documents, etc. from Respondent No. 1 as also from other Respondents and the above Applicants. A comprehensive Report was to be furnished thereafter within a period of 3 months.
6. Subsequently, the DGAP has furnished his Report dated 23.03.2020 received on 16.04.2020 after re-investigation in the matter under Rule 133(4) of the Central Goods & Service Tax Rules, 2017 and has reported that the above facts were not known to the DGAP at the time of initial investigation as complete and relevant documents were not submitted by the Respondent No. 1, therefore, summons under Section 70 of the Central Goods and Services Tax Act, 2017 read with Rule 132 of the above Rules were issued on 08.11,2019 to Shri Ram Dhari Gupta, Director of the Respondent No. 1 to appear before the DGAP on 15.11.2019 and produce the relevant documents. The DGAP has intimated that the period of investigation was extended up to August 2019 as it would cover profiteering of flats sold between September 2018 to August 2019. Thus, the period covered by the current investigation was from 01.07.2017 to 31.08.2019. The DGAP has informed that the time limit to complete the investigation was extended up to 25.03.2020 by this Authority, vide letter dated 24.12.2019, in terms of Rule 129(6) of the Rules.
7. The DGAP has stated that Respondent No. 1 in response to his letter dated 10.10.2019 had furnished his replies. Thereafter, the DGAP in his findings has stated that the main issue to be determined was the quantum of profiteering. The DGAP has analyzed from the information submitted by Respondent No. 1, duly reconciled with the ST-3, VAT, GSTR-1, and GSTR-3B Returns for the period from April 2016 to August 2019, the details of the input tax credit availed by him, his turnover from the commercial project “Oodles Skywalk” and computed the ratios of input tax credit to turnover, during the pre-GST (April 2016 to June 2017) and post-GST (July 2017 to August 2019) periods which have been furnished by the DGAP in Table-A below:-
Table-A’
(Amount in Rs.)
