Case Law Details

Case Name : Sh. Madhumal Panjumal Keswani Vs Panchshil Infrastructure Holding Pvt. Ltd. (NAA)
Appeal Number : Case No. 62/2022
Date of Judgement/Order : 29/08/2022
Related Assessment Year :

Sh. Madhumal Panjumal Keswani Vs Panchshil Infrastructure Holding Pvt. Ltd. (NAA)

The present Report dated 25.10.2021 has been received from Applicant No. 2 i.e the Director General of Anti-Profiteering (DGAP) after a detailed Investigation under Rule 120(6) of the Central Goods & Service Tax (CGST) Rules, 2017 The brief facts of the present case are that the Standing Committee on Anti-profiteering, received an Application under Rule 128 of the CGST Rules. 2017 filed by Applicant No. 1 alleging profiteering in respect of construction service supplied by the Respondent. Applicant No. 1 alleged that the Respondent has not passed on the benefit of ITC to him by way of commensurate reduction in the price on purchase of Apartment No. 503, Tower-E, from the Respondent in the Project Panchshil Towers situated at Kharadi, Pune on the introduction of GST w.e.f. 01.07.2017, in terms of Section 171 of the CGST Act, 2017.

Given the above discussions. the Authority finds that the Respondent has profiteered by Rs 1,98,69,483/- for the Protect “Panchshil Towers” during the period of investigation i.e. 01.07.2017 to 30.11.2020. The above amount that has been profiteered by the Respondent from his home buyers/customers/recipients in the above said Project shall be refunded by him, along with interest @18% thereon, from the date when the above amount was profiteered by till the date of passing on/payment, as per the provisions of Rule 133(3) (b) of the CGST Rules. 2017

The Respondent is also liable to pay Interest as applicable on the entire amount profiteered. i.e. Rs 1,96,69,483/- for the Project ‘Panchshil Towers’ Hence the Respondent is directed to also pass on interest @18% to the customers/flat buyers/recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the dale of passing on, payment, as per the provisions of Rule 133 (3) (b) of the CGST Rules 2017

Panchshil Infrastructure guilty of profiteering in Panchshil Tower project

The complete list of home buyers/customers/recipients has been attached as Annexure – ‘A’ with this Order, containing the details of the amount of benefit of ITC to be passed on in respect of the Project ‘Panchshil Towers’ of the Respondent.

This Authority also orders that the profiteered amount of Rs 1,96,69,483/- for the Project ‘Panchshil Towers’ along with the interest 18% from the date of receiving of the profiteered amount from the home buyers/customers/recipients 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.

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 ‘Panchshil Towers’ 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. That 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 30.11.2020, therefore, he is liable for imposition of penalty under the provisions of the above Section for the amount profiteered from 01.01.2020 onwards Accordingly, notice be issued to him to explain why penalty should not be imposed on him

The concerned jurisdictional COST/SGST Commissioner is directed to ensure compliance of this Order It may be ensured that the benefit of ITC is passed on to each home buyers/customers/recipients as per Annexure- A attached with this Order along with interest @18% as prescribed if not paid already. In this regard an advertisement of appropriate size to be visible to the public may also he 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 Panchshil Infrastructure Holding Pvt. Ltd.. Project- “Panchshll Towers”. Location- Khaiadi, Pune, Maharashtra and amount of profiteering i.e Rs 1,96,69,483/- so that the concerned home buyers/customers/recipients can claim the benefit of ITC if not passed on Homebuyers/customers/recipients may also be informed that the detailed NAA Order is available on Authority’s website www,naa.gov in Contact details of the concerned Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement.

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

It is clear to us that the Respondent has profiteered in the project ‘Panchshil Towers’ Therefore. as per the provisions of Section 171(2) of the CGST Act, 2017 this Authority has reasons to believe that there is a need to verify all the Input Tax Credits of the Respondent so as to arrive at the aggregate profiteering of the Respondent since profiteering on the part of the Respondent has already been established in the case of “Panchshil Towers’ project of the Respondent as also the tact that supplies from various protects of the Respondent are being made through a single GST registration and the same ITC Pool/Electronic Credit Ledger is being used for all the supplies being made from that registration Therefore. the Authority, in line with the provisions of Section 171(2) of the CGST Act, 2017 and as per the amended Rule 133 (5) (a) of the CGST Rules, 2017 directs the DGAP to further examine all the other projects of the said Respondent for possible violations of the provisions of Section 171 of the CGST Act, 2017 and to submit his Report as per the provisions of Rule 133 (5) (b) of the CGST Rules, 2017, since there are adequate reasons to believe that the Respondent may not have passed on the her benefit of ITC to his recipients in terms of Section 171(1) of the Act ibid, in the same manner as in the project in hand, i.e. ‘Panchehil Towers’.

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