Case Law Details
Sh. Nagendra Kumar Biyani Vs Indiabulls Real Estate Ltd. (NAA)
The Respondent has contended that Section 171 of the CGST Act and Rule 126 of the CGST Rules are violative of Article 14 and Article 19 of the Constitution of India. In this connection, this Authority holds that the Authority has not acted in any way as price controller or regulator as it doesn’t have the mandate to regulate the same. The Respondent is absolutely free to exercise his right to practice any profession, or to carry on any occupation, trade or business, as per the provisions of Article 14 and 19 (1) (g) of the Constitution. He can also fix his prices and profit margins in respect of the supplies made by him Under Section 171 this Authority has only been mandated to ensure that both the benefits of tax reduction and ITC which are the sacrifices of precious tax revenue made from the kitty of the Central and the State Governments are passed on to the end consumers who bear the burden of tax. The intent of this provision is the welfare of the consumers who are voiceless. unorganised and vulnerable. This Authority is charged with the responsibility of ensuring that the both the above benefits are passed on to the general public as per the provisions of Section 171 read with Rule 127 and 133 of the CGST Rules, 2017. The anti-profiteering related Rules and Section 171 of the Act have express approval of the Parliament, all the State Legislatures, the Central and all the State Governments and the GST Council and therefore, Section 171 and the Rules are constitutional and are not violative of Article 14 and 19 (1) (g) of the Constitution. This Authority has nowhere interfered with the business decisions of the Respondent and therefore. there is no violation of Article 14 and 19 (1) (g) of the Constitution
The Respondent has also cited the judgement of the Hontle Supreme Court passed in case of Commissioner, Central Excise & Customs, Kerala vs. Larsen & Toubro Limited 2016 (1) SCC 170, CIT vs. B.C. Srinivasa Setty 1981 (2) SCC 460, K. Damodarswamy Naidu & Bros and others vs. State of T.N. 2000 (1) SCC 521 and Govind Saran Ganga Saran vs. CST 2985 (Supp.) SCC 205 and stated that in the absence of a machinery provision for assessment of tax, the levy itself failed and is liable to be struck down as unconstitutional. On this aspect it is to be noted that no tax has been imposed under the above measures and hence the law settled in the above cases is not applicable. However, it would be relevant to mention here that Section 171 (2) of the CGST Act, 2017 and Rule 122, 123, 129 and 136 of the CGST Rules, 2017 have provided an elaborate machinery in the form of this Authority, the Standing and Screening Committees, the DGAP and a large number of field officers of the Central and the State Taxes to implement the anti-profiteering provisions. Therefore, the Respondent cannot allege that no machinery has been provided to implement the above measures.
The Respondent has submitted that Rule 126 of the CGST Rules is in violation of Section 171 itself In this regard, the Authority finds that, as per Rule 126 of the CGST Rules, the Authority has been empowered to determine the methodology and procedure for determination as to whether the reduction in the rate of tax or the benefit of input tax credit has been passed on by the registered person to the recipients by way of commensurate reduction in prices or not Rule 126 of the CGST Rules is reproduced below for ready reference: –
“126. The authority may determine the methodology and procedure for determination as to whether the reduction in the rate of tax on supply of goods or services or the benefit of input tax credit has been passed on by the registered poison to the recipient by way of commensurate reduction in price.”
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