Case Law Details

Case Name : Sunil Saraf Vs Paramount Propbuild Pvt Ltd. (NAA)
Appeal Number : Case No. 60/2022
Date of Judgement/Order : 23/08/2022
Related Assessment Year :

Sunil Saraf Vs Paramount Propbuild Pvt Ltd. (NAA)

The brief facts of the present case was that a reference was received from the Standing Committee on Anti-Profiteering to the DGAP for conducting a detailed investigation in respect of an application filed by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of a Unit/Flat No. 0-621 in Tower Oak in the Respondent’s project ‘Paramount Golfforeste’ situated at Plot No. BGH-A, Site-C (Housing Extn.), Opp. Sector Zeta, Surajpur, Greater Noida. The Applicant No. 1 has alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price after the Implementation of GST w.e.f. 01.07.2017.

Authority finds that the Respondent has profiteered by an amount of Rs. 93,63,948/- during the period of investigation e. July-2017 to October-2020. Such amount profiteered by the Respondent from his customers/home buyers/recipients in the above project shall be refunded/returned/passed on by him, along with interest 018% thereon, from the date when the above amount was profiteered by him till the date of such refund/return/payment, In accordance with the provisions of Rule 133 (3) (b) of the GCST Rules 2017.

With respect to the benefit of ITC amounting to Rs. 9,26,233/- already passed on to the 87 home buyers by the Respondent, the report of the DGAP is not clear that whether the Respondent has refunded the above profiteered amount to the home buyers alongwlth interest @18% or not. Hence, the aspect whether the Respondent has paid the interest on the above profiteered amount of Rs. 9,26,233/- is required to be verified.

The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 93,63,948/-. 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 date of passing on/ payment, as per provisions of Rule 133 (3) (b) of the CGST Rules 2017.

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

We also order that the profiteering amount of Rs. 93,63,948/- along with the interest @ 18%, from the date of receiving of profiteered amount from the customers/home buyers/recipients till the date of passing the benefit of ITC/profiteered amount, shall be paid/passed on by the Respondent within a period of 3 months from the date receipt of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017.

FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY

1. The Present Report dated 15.12.2021 had been furnished by the Applicant No. 2 i.e. 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 present case was that a reference was received from the Standing Committee on Anti-Profiteering to the DGAP for conducting a detailed investigation in respect of an application filed by the Applicant No. 1 alleging profiteering by the Respondent in respect of purchase of a Unit/Flat No. 0-621 in Tower Oak in the Respondent’s project ‘Paramount Golfforeste” situated at Plot No. BGH-A, Site-C (Housing Extn.), Opp. Sector Zeta, Surajpur, Greater Noida. The Applicant No. 1 has alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price after the Implementation of GST w.e.f. 01.07.2017.

2.Vide the above Report, the findings of the DGAP are as under:-

a. The aforesaid reference was examined by the Standing Committee on Anti-profiteering in its meeting held on 19.08.2020 (received In this office of the DGAP on 15.10.2020), whereby it was decided to forward the same to this office to conduct a detailed investigation In the matter. On receipt of the above reference, a Notice dated 09.11.2020 under Rule 129 of the above Rules, asking the Respondent to Intimate as to whether he admitted that the benefit of ITC had not been passed on to the above Applicants by way of commensurate reduction in the price of the flats and In case it was so, to suo-moto compute the quantum of the same and mention It in his reply to the Notice along with the supporting documents. Vide the said notice, the Respondent was also given an opportunity to inspect the non-confidential evidences/information furnished by the Applicant, during the period 11.2020 to 30.11.2020, which was not availed of by him.

b. Despite the above notice and several reminders, the Respondent did not submit all the requisite documents on the due date. Hence, a Summons dated 19.02.2021 and 11.03.2021 under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules, were issued to Sh  Mukesh Agarwal (Director) to submit all the relevant documents. In response, the Respondent replied vide letter dated 22.03.2021 and submitted some of the requisite information/documents. Further, vide letter dated 30.04.2021, 31.05.2021, 25.06.2021, 03.08.2021, 01.09.2021, 22.09.2021 and 30.09.2021, the Respondent submitted all requisite documents.

c. The Applicant No. 1 was also given an opportunity to inspect the non-confidential documents/reply furnished by the Respondent, on 18.10.2021 or 19.10.2021, which was availed of by him on 18.10.2021. He has further declared that the Respondent had passed on the benefit of ITC to him and settled all the issues with him.

d. The period covered by the current investigation is from 01.07.2017 to 31.10.2020.

e. The time limit to complete the investigation was 14.04.2021. However, due to prevalent pandemic of COV1D-19 in the country, the Hontile Supreme Court of India passed an Order dated 08.03.2021 In Suo Motu Writ Petition (Civil) No. 3/2020 (Annex-3), wherein, it was stated that “in racos where the limitation would have expired during the period between 15.03.2020 till 15.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance penod of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. The above relief has been extended and the period from 14.03.2021 till further orders shall also stand excluded in computing the limitation period as per the Hon’ble Supreme Court’s Order dated 27.04.2021 passed in Miscellaneous Application No. 665/2021 In SMW(C) No. 3/2020. Further the above relief has been extended and the period from 02.10.2021 shall have a limitation period of 90 days from 03.10.2021 as per the liontile Supreme Court’s Order dated 23.09.2021 passed In Miscellaneous Application No. 665/2021 In SMW(C) No. 3/2020.

f. In response to the Notice dated 09.11.2020 and several reminders & Summons, the Respondent submitted his reply vide letters and e-mails dated 23.11.2020, 30.11.2020,      28.12.2020, 22.01.2021, 12.02.2021, 08.03.2021, 22.03.2021, 30.04.2021, 31.05.2021, 25.06.2021, 03.08.2021, 01.09.2021, 22.09.2021 and 30.09.2021.

The replies of the Respondent has been summed up by the DGAP as follows:-

i. The Applicant No. 1 vide letter dated 20.11.2020 had communicated to the DGAP that he was no longer interested to continue the investigation and had requested for withdrawal of the same.

ii. The project under investigation i.e. “Paramount Golfforeste” was launched in 2011 and was not registered under RERA.

iii. In respect of the customers who booked the flats after 01.07.2017, the price was negotiated afresh taking into consideration various factors including benefit of ITC. Both the seller and the buyer were aware of the benefit of ITC and the same was factored in the agreed price during the execution of builder buyer agreement/allotment letter. Therefore, the Respondent requested the booking made post 01.07.2017, should not be considered while computing the profiteering.

iv. For Pre-GST bookings in the said project, benefit of increased ITC has already been computed and passed on to the buyers which were duly communicated and agreed upon by the buyers at the bme of granting of possession by issuing credit note to them.

g. The Respondent informed that all the data/Information provided by him, except documents related to Applicant/complalnant like allotment letter and demand letters, were confidential in nature in terms of Rule 130 of the CGST Rules, 2017.

h. The DGAP has also stated that all the documents placed on record were carefully examined by him and it was found that the main Issues for determination were whether there was a reduction In the rate of tax or benefit of ITC on the supply of construction service by the Respondent after implementation of the GST w.e.f. 01.07.2017 and in case it was so, whether the Respondent had passed on the above benefits to the home buyers as per the provisions of Section 171 of the CGST Act, 2017 or not.

i. The DGAP has further stated that para 5 of Schedule-III of the Central Goods and Services Tax Act, 2017, defining 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 Central Goods and Services Tax 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 the completion certificate, where required, by the competent authority or after its first occupation, whichever Is earlier’. In the light of these provisions, the DGAP has contended that the ITC of the units which were under construction but not sold was provisional ITC that may be required to be reversed by the Respondent, if such units would remain unsold at the time of Issue of Completion Certificate (CC), in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017.

j. Therefore, the DGAP has claimed that the ITC of the unsold units was outside the scope of this investigation and the Respondent was required to recalibrate the selling price of such units to be sold to the prospective buyers by considenng the net benefit of additional ITC available to him post-GST.

k. The contention of the Respondent is that the prices quoted to the customers who have booked units In the post GST regime were Inclusive of the benefit under Section 171 of the CGST Act, 2017. The builder buyer agreement/ allotment letter mentions the same as follows:-

“The unit sale price Is net off input tax credit benefit of 637″.”

However, in order to examine this aspect, the builder buyer agreement/allotment letter in respect of all the buyers who had booked flats in the post GST period was required to be scrutinized. As per the home-buyers list submitted by the Respondent it was observed that 185 number of buyers had purchased the flats from the Respondent during the period of investigation. However, on scrutiny it was observed that the Respondent had submitted allotment letters only in respect of 175 numbers of buyers. On scrutiny of these 175 allotment letters, it Is observed that these documents clearly mentioned that the unit sale price of the flats is net off input tax credit benefit of GST.

l. The DGAP has observed that the Respondent’s contention that the benefit of ITC of GST already considered in the consideration value and passed on to the buyers in respect of post GST bookings, was correct only to the extent of 175 number of buyers whose agreements were submitted by the Respondent and in which the aforesaid clause was clearly indicated. Accordingly, while computing the profiteering amount, the turnover in respect of those 175 buyers who had booked flats in the post GST penod and whose allotment letters clearly mentioned the aforesaid clause, was exduded as mentioned in Table-B. In respect of remaining 10 (185-175) buyers, the allotment letters were not submitted by the Respondent and thus benefit In respect of the said 10 buyers was not extended while computing profiteering amount.

m. Prior to 01.07.2017, i.e., before the GST was introduced, the Respondent were eligible to avail credit of Service Tax paid on the input services (CENVAT credit of Central Excise duty was not available) in respect of the flats for the project “Paramount Golfforeste” sold by him. However, the Respondent was not eligible to avail input tax credit of VAT paid on the inputs/purchases in the pre GST period. Further, post-GST, the Respondent could avail ITC of GST paid on all the inputs and input services. From the data submitted by the Respondent covering the period 01,04.2016 to 31.10.2020, the ratio of ITC to turnover, during the pre-GST (01.04.2016 to 30.06.2017) and post-GST (01.07.2017 to 31.10.2020) penods, has been furnished by the DGAP In Table-A below:-

Table – ‘A’

(Amount in Rs.)

Paramount Golfforeste

n. As per the above Table-A, It was evident that the ITC as a percentage of the total turnover that was available to the Respondent during the pre-GST period (01.04.2016 to 30.06.2017) was 0.84% and during me post-GST period (01.07.2017 to 31,10.2020), it was 3.27% in the Project “Paramount Golfforeste”, the Respondent has been benefited from additional ITC to the tune of 2.43% (3.27% (-) 0.84%) of the turnover.

o. Therefore, on the basis the figures contained in Table-‘A’ above, the comparative figures of the ratio of TTC availed/available to the turnover In the pre-GST and post-GST periods as well as the turnover, the recalibrated base price and the excess realization (profiteering) during the post-GST period, has been furnished by the DGAP In Table ‘B’ below-

Table-B

Amount in Rs.

excess realization

p. The DGAP has also observed from Table-13′ above that the additional ITC of 2.43% of the turnover should have resulted in commensurate reduction in the base price as well as cum-tax price Therefore, in terms of Section 171 of the CGST Act, 2017, the benefit of the additional ITC that was required to be passed on to the recipients Rs. 93,63,948/- which includes 12% GST on the base amount of Rs. 83,60,668/-.

q. The Respondent had booked 1224 flats till 31.10.2020, out of these 1224, the Respondent have booked 1039 flats in the pre GST period and 185 fiats were booked in the post GST period. Out of 185 buyers (post GST bookings), 175 buyers were excluded while computing profiteering amount as the benefit of ITC was passed on to these buyers while fixing the consideration of the flat as per their allotment letters (Row no. 7 of Table-C below).

r. The DGAP has reported that for the purpose of verification of ITC benefit claimed to have been passed on to the homebuyers who booked the flats in the pre-GST period, the Respondent has provided the details of benefit of ITC passed on to Individual homebuyers. This list was matched with the soft copies of credit notes issued to home buyers by the Respondent. On verification of the soft copies of credit notes, it appeared that out of 1039 buyers (pre GST bookings), the Respondent has passed on the ITC benefit to 847 homebuyers only. In order to further cross check the benefit of ITC already passed on as claimed by the Respondent, e-mails were sent to the buyers. 87 buyers (Row no. 3 of Table – C) have replied and gave confirmation of passing of ITC benefit as claimed by the Respondent. The copies of e-mail confirmations were enclosed by the DGAP In Annex-21 of his report. Also, the Applicant No. 1 had confirmed the benefit of ITC passed on by the Respondent. 73 buyers (Row no. 4 of Table – C) have denied that the benefit of ITC was not passed on to them by the Respondent. Further, it was also observed that the Respondent had passed on excess benefit than what he was required to pass on in respect of 87 buyers (Row no. 3 of Table – C) and that the Respondent was required to pass on benefit In respect of 730 (73+657) buyers (Row no. 4 & 5 of Table -C). In respect of 30 buyers (Row No. 1 & 2 of Table-C), no consideration was received during the period 01.07.2017 to 31.10.2020. Hence, they have also been kept out of the computation of profiteering. Moreover, the Respondent has not passed on arty benefit to 192 buyers (Row No. 6 of Table-C) which were evident from Annex-25 of the DGAP’s report.

s. In view of the above, the DGAP has reported that the contention of Respondent that benefit to all the homebuyers has been passed on, was considered only to the extent of 87 buyers only who have given confirmations on email and in respect of remaining 730 buyers (817­87) it was not considered, as 73 buyers have replied in the negative and 657 buyers have not replied. A summary of benefit of ITC required to be passed on and the ITC benefit claimed to have been passed on to the Applicant No. 1 and other home buyers, has been furnished by the DGAP in Table-‘C’ below:-

summary of benefit of ITC

t. On the basis of the details of outward supplies of the construction service submitted by the Respondent, it was observed that the service had been supplied by him in the State of Uttar Pradesh only.

u.  The DGAP has concluded that the benefit of additional ITC to the tune of 2.43% of the turnover, accrued to the Respondent post-GST and the same was required to be passed on by the Respondent to their recipients. The provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent, In as much as the additional benefit of ITC 02.43% of the base price received b- the Respondent during the period 01.07.2017 to 31.10.2020, had not been passed on to the recipients. On this account, it is also concluded that the Respondent have realized an amount to the tune of Rs. 93,63,948/- (including GST), which was the total profiteered amount as mentioned at Row No. 4, 5, 6 & 8 of the Table-C supra. Out of this, the Respondent had already passed on the ITC benefit of Rs. 9,26,233/- (including GST) liable to be passed on to 87 buyers as mentioned in Row No. 3 of Table – ‘C’, which has been confirmed by the home buyers through e-mails. Therefore, the Respondent has to pass on an amount of Rs. 84,37,715/- (Rs. 93,63,948 – Rs. 9,26,233) (inciuding GST). The recipients were identifiable as per the documents provided by the Respondent, giving the names and address along with unit number allotted to such recipients.

v. That the present investigation covered the period from 01.07.2017 to 31.10.2020. Profiteering, if any, for the period post October, 2020, had 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.

Paramount Propbuild guilty of Profiteering in project 'Paramount Golfforeste'

3. The above Report was carefully considered by this Authonty and a notice dated 25.02.2022 was issued to the Respondent to explain why the Report dated 15.12.2021 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 also directed to file his written submissions by 15.03.2022. In reply to the notice dated 25.02.2022, the Respondent filed his submissions dated 04.04.2022 vide which he has stated that:-

a. has passed on the benefit of ITC to his customers by way of a commensurate reduction In the prices. The details of the benefit passed on by the Respondent to his buyers wherein the DGAP has either not received or received negative reports from the buyers alongwith copies of credit notes has been enclosed.

b. The liability could not be fastened upon him merely on the basis of negative confirmation from 73 buyers. It would be highly unjust to held that the Respondent has not passed on the benefit of ITC to such buyers.

c. The DGAP has observed that there were some home buyers who were not certain whether they had received the benefit of ITC from the Respondent or not. In such case, a proper verification should be done by this Authority and the home buyers should be asked for some documentary evidence in support of their daim that they had not received the benefit of tit from him and he must not be liable to prove the cases.

d. No response from the buyers could not be equated as non-passing of the benefit of ITC. The buyers who did not respond to the DGAP’s e-mail, must be subjected to proper verification by this Authority and they should also he asked for some documentary evidences regarding their prospective.

e. The allegation of the DGAP that out of 185 home buyers who booked their flats In the post-GST regime, the Respondent has failed to submit the copies of allotment letters In respect of the 10 buyers is not correct. As on date out of the 10 units, 08 units were cancelled and only 01 buyer has continued with the booking and payment and was In receipt of the Allotment Letter. Copy of the same was enclosed. With respect to the remaining 01 unit, the buyers had just paid the token amount and had not proceeded further with the booking.

f. The DGAP has alleged that the Respondent has not passed on the benefit of ITC amounting to Rs. 7,01,604/- as mentioned in Table-C of the Report. However, the DGAP has not provided any reason for the above amount of profiteering. The above amount has been created in a vague manner as his was not able to defend the aforesaid amount of profiteering in absence of any specific reason. The Respondent has relied upon the decision of Honble Supreme Court In the case of Canara Bank & Ors. Vs. Shn Debasis Das & Ors. AIR 2003 SC 2041, Oryx Fisheries Private Limited Vs. Union of India 2011 (266) E.L.T. 422 (S.C.) and A.K. Kraipak Vs. Union of India AIR 1970 SC 150 in his support.

4. Clarifications under Rule 133(2A) of the CGST Rules, 2017 were also sought from the DGAP on the above submissions dated 04.04.2022 filed by the Respondent. The DGAP has filed his clarifications dated 04.05.2022 vide which he has stated that:.

a. Upon perusal of Section 171, it was clear that “reduction in the rate of tax on any supply of goods or services” did not mean that the reduction In the rate of tax was to be taken at the level of an entity/group/company for the entire supplies made by it. The benefit was required to be passed on to each recipient commensurately. Therefore, the benefit of tax reduction has to be passed on at the level of each supply to each buyer and in case it was not passed on, the profiteered amount has to be calculated on each supply.

b. In the present case, as per Para 18(b) of the Report of the DGAP dated 15.12.2021, upon verification of the soft copies of credit notes issued to the home buyers, it appeared that out of 1039 buyers (pre-GST bookings), the Respondent claimed to have passed on the ITC benefit to 847 home buyers only. In order to further cross check the benefit of ITC already passed on, e-mails were sent to the buyers, out of those 87 buyers have replied In affirmation of passing of ITC benefit while 73 denied the benefit of ITC. In respect of 87 buyers, excess benefit was passed on by the Respondent which should have been passed on commensurately to each buyer. Thus, the Respondent did not pass commensurate benefit to all buyers.

c. Only the amount passed on by the Respondent to the home buyers, which has been confirmed by the home buyers via e-mails has been considered. No other claim of the Respondent regarding passing on the benefit of ITC to home buyers has been considered.

d. Out of 1039 buyers, the Respondent claimed to have passed on the ITC benefit to 847 home buyers only. As the unclear replies were not confirming that the buyers had received the benefit, the same were not considered.

e. During the course of hearing, the Respondent has not provided copies of allotment letters of the 10 buyers. Hence, it was not possible to investigate in respect of these 10 buyers.

f. The profiteenng of Rs. 7,01,604/- was worked out on the basis of the data furnished by the Respondent in the home buyers list. This amount of profiteering pertained to 192 buyers as per Annexure-25 of the Report of the DGAP.

5. The Applicant No. 1 has also filed his written submissions dated 09.05.2022 vide which he has stated that the Respondent has settled the case with him by passing on the benefit of ITC to him.

6. Hearing in the case was fixed for 14.06.2022. However, the Respondent sought adjournment and hence it was rescheduled for 11.07.2022. The Respondent has filed his written submissions dated 09.07.2022 vide which he reiterated his earlier submissions and has stated that he did not want any personal hearing in this matter and requested to conclude the case.

7. We have carefully considered all the submissions filed by the Applicant No. 1, the Respondent, and the other material placed on record. On examining the various submissions we find that the following issues need to be addressed:-

i. Whether there was any violation of the provisions of Section 171 (1) of the CGST Act, 2017 In this case?

ii. If yes what was the additional benefit that has to be passed on to
the recipients?

8. After careful examination of the documents placed on record, the observations of this Authority are as under:-

a) The Applicant No. 1 had alleged that the Respondent was not passing on the benefit of ITC to him on purchase of the Flat, which he had purchased in the “Paramount Golfforeste” Project being executed by the Respondent In Greater Noida, Uttar Pradesh by way of commensurate reduction In the pnces after the implementation of the GST w.e.f. 01.07.2017.

b) This complaint was examined by the Standing Committee and forwarded to the OGAP for Investigation under Rule 129 (1) of the above Rules.

c) Section 171 (1) of the CGST Act, 2017 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 as to whether there was any net benefit of ITC with the introduction of GST.

d) On this issue it has been reported by the DGAP as tabulated above, that the Respondent has been benefited from additional FTC to the tune of 2.43% of the turnover. Thus, the Respondent had profiteered an amount of Rs. 93,63,948/- by not passing on the ITC benefit to his buyers.

e) The period of investigation in the present case is from 01.07.2017 to 31.10.2020.

f) We find that, during the course of investigation, the Respondent contended that with respect to the home buyers who booked their units In the post•GST regime, the price quoted to the customers was inclusive of the benefit of rrc under Section 171 of the CGST Act. The builder buyer agreement/ allotment letter mentions the same as follows:-

“The unit sale price Is net off Input tax credit benefit of GST.”

g) In order to examine the above aspect, the DGAP has scrutinized the Builder Buyer Agreement/Allotment Letters In respect of all the buyers who had booked flats In the post-GST period and observed that 185 number of buyers had purchased flats from the Respondent In the during the period of Investigation. However, the Respondent has suemitted Allotment Letters only in respect of 175 home buyers. And upon scrutiny of these documents, the DGAP has observed that these documents clearly mentioned that the unit sale price of the flats was net off ITC benefit of GST. Hence, the DGAP has concluded that the above contention of the Respondent was correct only to the extent of 175 home buyers whose agreements were submitted by the Respondent and in which the aforesaid clause was clearly indicated. Accordingly, while computing the profiteered amount, the DGAP has excluded the turnover in respect of these 175 buyers who had booked flats in the post-GST period and whose allotment letters clearly mentioned the aforesaid clause.

h) The Respondent booked 1224 flats till 31.10.2020. Out of these 1224, the Respondent had booked 1039 flats in the pre-GST period and the remaining 185 flats were booked in the post-GST period.

i) The Respondent has claimed that he has passed on the benefit of ITC to his home buyers and submitted copies of credit notes Issued to the home buyers. The DGAP has verified the above claim of the Respondent and has found that out of 1039 buyers, the Respondent has passed on the benefit of lit to 847 home buyers.

j) Further, in order to verify the claim of the Respondent, the DGAP has sent e-mails to the home buyers. Only 87 home buyers replied and confirmed that they had received the benefit of FTC from the Respondent. The profiteered amount In respect of these 87 home buyers Is Rs. 9,26,233/-. The copies of the confirmation of the home buyers through e-malls have been provided by the DGAP in Annexure-21 of his report dated 15.12.2021.

k)  We find that the amount of profiteering ceiculated by the DGAP in the present case is Rs. 93,63,942/-.

l) This Authority finds no reason to differ from the above-detailed computation of profiteering in the DGAP’s Report or the methodology adopted.

9. One of the main contentions of the Respondent in the present case is that he has passed on the benefit of ITC to his customers by way of commensurate reduction in the prices. He has also submitted copy of some Credit Notes issued to the home buyers. With respect to the above contention of the Respondent, we find that in the present case, the Respondent has submitted some copies of Credit Notes issued to the home buyers. However, to substantiate his claim, the Respondent was required to submit customer-wise documentary evidence showing the profiteered amount along with the acknowledgement receipt regarding passing on of the benefit of ITC from all his customers. However, during the course of proceedings, the Respondent has not submitted all the purported acknowledgement receipts received from each and every customer/flat buyer (to whom ‘ITC benefit is claimed to have been passed on) stating that they have received the benefit of ITC from the Respondent. Hence, the claim of the Respondent that he has passed on the benefit of ITC to all his customers is not substantiated by arty verifiable record so as to determine the veracity of such claim. Hence, such claim of the Respondent needs proper and In depth verification by way of receipt of acknowledgements from each and every customer that they have received the benefit of ITC from the Respondent and verification of the authenticity of such documents. Hence, in the absence of authentic acknowledgment receipts/ verifiable evidence/ documents from the customers/flat buyers, the Authority finds that It cannot be accepted that the Respondent has passed on the benefit of ITC to his homebuyers/customers/recipients.

10. The Respondent has further argued that the liability of non-passing of benefit of ITC could not be fastened upon him merely on the basis of negative confirmation from some (73) home buyers. In this regard, we observe that negative confirmation received from the customer/home buyer clearly indicates that they have not received the benefit of ITC from the supplier and hence, it cannot be held that the customers/home buyers have received the benefit of ITC. Passing on the benefit of ITC to the home buyers Is a matter of proper verification. Hence, In the absence of proper acknowledgement receipts from the customers and without proper verification thereof the contention of the Respondent cannot be accepted.

11. The Respondent has also alleged that allegation of the DGAP regarding non-passing on the benefit of ITC amounting to Rs. 7,01,604/ as mentioned at Sr. No. 6 in Table-C of the DGAP’s Report Is not correct as the DGAP has not provided any reason specific reason for the same. He has also relied upon the decision of Honble Supreme Court in the case of Canara Bank & Ors. Vs. Shri Debasis Das & Ors. AIR 2003 SC 2041, Oryx Fisheries Private Limited Vs. Union of India 2011 (266) E.L.T. 422 (S.C.) and A.K. Kralpak Vs. Union of India AIR 1970 SC 150. This Authority finds that, with respect to the above contention of the Respondent, the above profiteered amount has been worked out by the DGAP on the basis of the data furnished by the Respondent in the home buyers list during the course of Investigation. The above amount is In respect of 192 home buyers and the same has been Indicated In Annexure-25 of the report of the DGAP dated 15.12.2021 which has been furnished to the Respondent vide notice dated 25.02.2022 Issued by this Authority. Further, the description of the above amount has also been provided as Sr. No. 6 in Table-C of the above report of the DGAP as ‘Other Buyers (No benefit passed on)’. Further, as per the above report of the DGAP, it is clear that the Respondent has benefited from additional ITC to the tune of 2.43% of the turncver. Thus, the Respondent had profiteered by an amount of Rs. 93,63,9413/- by not passing on the ITC benefit to his buyers. The total profiteered amount of Rs. 93,63,948/- is inclusive of such amount of Rs. 7,01,604/, Therefore, the Respondent cannot claim that the above amount Ias been computed by the DGAP without any specific reason. Hence, the above contention of the Respondent being incorrect, cannot he accepted and the case law relied upon by him are of no help to him as the specific reason for the above amount has been mentioned in the report of the DGAP.

12. Thus, the Authority finds that the Respondent has profiteered by an amount of Rs. 93,63,948/- during the period of investigation e. July-2017 to October-2020. Such amount profiteered by the Respondent from his customers/home buyers/recipients in the above project shall be refunded/returned/passed on by him, along with interest 018% thereon, from the date when the above amount was profiteered by him till the date of such refund/return/payment, In accordance with the provisions of Rule 133 (3) (b) of the GCST Rules 2017.

13. With respect to the benefit of ITC amounting to Rs. 9,26,233/- already passed on to the 87 home buyers by the Respondent, the report of the DGAP is not clear that whether the Respondent has refunded the above profiteered amount to the home buyers alongwlth interest @18% or not. Hence, the aspect whether the Respondent has paid the interest on the above profiteered amount of Rs. 9,26,233/- is required to be verified.

14. The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 93,63,948/-. 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 date of passing on/ payment, as per provisions of Rule 133 (3) (b) of the CGST Rules 2017.

15. 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 buyers of the customers/home buyers/recipients commensurate with the benefit of ITC received by him as has been detailed above.

16. We also order that the profiteering amount of Rs. 93,63,948/- along with the interest @ 18%, from the date of receiving of profiteered amount from the customers/home buyers/recipients till the date of passing the benefit of ITC/profiteered amount, shall be paid/passed on by the Respondent within a period of 3 months from the date receipt of this order failing which it shall be recovered as per the provisions of the CGST Act, 2017.

17. The amount to be refunded to each customer/home buyer/recipient is as per Annexure A attached with this Order, if not already paid.

18. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to his customers/home buyers/recipients 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 July-2017 to October-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.

19. The concerned jurisdictional CGST/SGST Commissioner is directed to ensure compliance of this Order. It may be ensured that the benefit of ITC is passed on to each customers/home buyers/recipients as details provided above along with interest @18%, if not paid already. In this regard an advertisement of appropriate size to be visible to the public may also be published In minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent): Paramount Propbuild Pvt Ltd., Project: Paramount Golfforeste, Location: Greater Nolda and Amount of Profiteering Rs. 93,63,948/-, so that the concerned customers/home buyers/recipients can claim the benefit of ITC, If not passed on. Customers/home buyers/recipients may also be Informed that the detailed NM Order Is available on Authority’s website naa.gov.in. Contact details of concerned Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement.

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

21. Further, the Honbie Supreme Court, vide its Order dated 23.03.2020 in Suo Moto Writ Petition (C) no. 3/2020, while taking suo-moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) Including those prescribed under Rule 133(1) of the CGST Rules, 2017, as is clear from the said Order which states as follows:-

“A period of limitation in all such proceedings, Irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.”

Further, the Hon’ble Supreme Court, vide Its subsequent Order dated 10.01.2022 has extended the period(s) of limitation PH 28.02.2022 and the relevant portion of the said Order is as follows:-

“The Order dated 23.03.2020 is restored and In continuation of the subsequent Orders dated 08.03.2021, 27.04.2021 and 23.09.2021, It is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general of special laws In respect of all judicial or quasi-judicial proceedings.”

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

22. Copy of this order be sent, free of cost, to the Applicant No. 1, the DGAP, the Respondent, Commissioners CGST/SGST Uttar Pradesh and the Prihdpill Secretary (Town and Country Planning), Government of Uttar Pradesh and U.P. RERA for necessary action. File be consigned after completion.

Annexed: Annexure A in Pages 1 to 24.

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