Mukesh Kumar Vs Supertech Limited (NAA)
It is observed that provision of the RERA Act, 2016 makes it mandatory for a real estate developer/promoter to maintain separate bank accounts for each of his projects registered separately under the RERA Act, 2016. In the case of the Respondent, the above provision implies that he was required to maintain five separate escrow/bank accounts in respect of the Five Phases of the project “Eco Village-2”, however, the DGAP’s Report has no mention of this aspect. It has a bearing on the instant proceedings since the DGAP’s Report dated 09.06.2020 only covers one of the five Phases i.e. ‘Phase-r. As the Respondent had obtained five separate RERA registrations for his five Phases, he should have maintained separate escrow/bank accounts. In case the Respondent has not complied with the above-mentioned provision of the RERA Act, 2016, then the entire project “Eco Village-2” comprising all its Phases, should be considered as a single project for the computation of profiteering, given that the Respondent has been maintaining a common ITC register/ITC ledger for all the Phases of his said project and has been filing common GST Returns for all the Phases of the said project “Eco Village-2”. Hence, the compliance of the Respondent with the above-referred provisions of the RERA Act, 2016, becomes paramount and needs to be examined. Given this, there arises the need to revisit the investigation to ascertain if the Respondent has passed on the benefit of ITC to the homebuyers of the other 4 Phases of the impugned project by a commensurate reduction in the prices of the residential units supplied by him in terms of Section 171 of the CGST Act, 2017.
Hence, in terms of the provisions of Section 171(2) of the CGST Act and for the reasons detailed in Para 21 above, the DGAP is directed to further investigate the present case under Rule 133 (4) of the CGST Rules, 2017 to ensure that the Respondent has passed on the benefit of ITC by way of a commensurate reduction in the prices in respect of all the residential units supplied by him. Hence, without dwelling upon any other aspect of the case and without going into any other contentions of the Respondent and the Applicants, this Authority, under the powers conferred on it vide Rule 133(4) of the CGST Rules read with Section 171(2) of the CGST Act 2017, directs the DGAP to reinvestigate this case and to recompute the quantum of profiteering based on above findings.
The DGAP is directed to submit a fresh Report after a detailed investigation as per Rule 129 (6) of the above Rules, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 09.06.2020 has been furnished by the Director-General of Anti-Profiteering (DGAP), under Rule 129(6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the case are that a reference was received by the DGAP from the Standing Committee on Anti-profiteering under Rule 129(1) of the CGST Rules, 2017 to conduct a detailed investigation in respect of an application filed by Applicant No.1 under Rule 128(1) of the CGST Rules, 2017, alleging profiteering in respect of construction service supplied by the Respondent. Applicant No. 1 had submitted that he had booked a 2-BHK flat in the Respondent’s project “Eco Village-2”, Greater Noida (West) and had alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price. The Standing Committee on Anti-profiteering on prima facie having satisfied itself that the Respondent had not passed on the benefit of ITC had forwarded the application of Applicant No. 1 with its recommendation to the DGAP for detailed investigation under Rule 129 (1). Further, the DGAP has also stated that, Applicant No. 1 has submitted the application duly filled in Form APAF-1.
2. The DGAP on receipt of the application and supporting documents from the Standing Committee on Anti-profiteering had issued a notice under Rule 129 (3) of the CGST Rules, 2017 on 14.08.2019 calling upon the Respondent 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 prices charged from him 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. Vide the above-mentioned notice dated 14.08.2019, the Respondent was also allowed to inspect the non-confidential evidence/information furnished by the Applicant No. 1, during the period from 20.08.2019 to 21.08.2019, which he had availed on 14.01.2020. Vide e-mail dated 21.05.2020, Applicant No. 1 was also allowed to inspect the non-confidential documents/replies furnished by the Respondent on 26.05.2020 to 27.05.2020, which was not availed of by Applicant No.
3. The DGAP has reported that the time limit to complete the investigation was extended up to 04.05.2020 by this Authority, vide its order dated 30.01.2020 in terms of Rule 129 (6) of the CGST Rules, 2017, and the period of the current investigation was from 01.07.2017 to 31.07.2019. However, due to the prevalent pandemic of COVID-19 in the country, the investigation could not be completed by the above date i.e. 04.05.2020. Therefore, in terms of Notification No. 35/2020 dated 03.04.2020 issued by the Central Government under Section 168 (A) of the CGST Act, where, any time limit for completion or compliance of any action, which fell during the period from the 20th day of March 2020 to the 29th day of June 2020, and where completion or compliance of such action had not been made within such time, then the time limit for completion or compliance of such action, stood extended up to the 30th day of June 2020, including for the purpose for furnishing of any report under the provision of the CGST Act, 2017 and the same was informed to this Authority vide letter dated 27.04.2020.
4. The DGAP has further submitted that the Respondent replied to the said notice vide various letters/ e-mails but did not furnish the complete and the relevant documents required for the investigation. Hence, Summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the above Rules, were issued on 16.01.2020 to the Respondent asking him to appear before the DGAP on 22.01.2020 and produce the relevant documents. In response to the Summons, the Respondent had submitted certain details vide letter dated 22.01.2020. Since the complete documents were not submitted by the Respondent, another Summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules, were issued on 27.01.2020 to the Respondent asking him to appear before the DGAP on 31.01.2020 and produce the pending relevant documents. In response to the Summons, the Respondent has submitted certain details vide letter dated 31.01.2020, 20.02.2020, and 26.02.2020 to the DGAP, However, on scrutinizing the documents submitted by the Respondent, it was observed that certain details/clarifications were required from the Respondent, and for this purpose, a letter dated 13.05.2020 was issued by the DGAP to the Respondent. The Respondent replied vide e-mail dated 20.05.2020 and submitted certain clarifications to the DGAP.
5. The DGAP has further reported that in response to the notice dated 14.08.2019 and subsequent reminders dated 24.09.2019, 15.10.2019 and 06.11.2019 and Summons dated 16.01.2020 and 27.01.2020, the Respondent submitted his replies vide letters/e-mails dated 03.10.2019, 20.11.2019, 06.01.2020, 15.01.2020, 22.01.2020, 31.01.2020, 20.02.2020, 26.02.2020, 20.05.2020 and 28.05.2020 vide which he had stated:
i. That the phase-I of the project “Eco Village-2” comprised 3 towers, namely B3, B4, and C6, altogether comprising of 501 units, out of which 1 unit had remained unsold as of 31.07.2019.
ii. That each phase of the project “Eco Village 2” was separately registered under RERA. Applicant No. 1 in the proceedings belonged to the tower B3 of the Phase-I of the project “Eco Village” which was separately registered under RERA No. UPRERAPRJ4112.
ii. The Respondent also submitted the details of the project: Eco Village-2 in terms of phases and towers as under:-
