2026-VIL-29-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-Profiteering - Jurisdiction of erstwhile NAA to direct further investigation beyond scope of original complaint in Anti-Profiteering Proceedings - Whether the erstwhile National Anti-Profiteering Authority possesses jurisdiction to direct investigation into goods and services beyond those covered in the original complaint or reference – HELD - The authority possesses wide jurisdiction to direct further investigation beyond the scope of the original complaint. Rule 133(4) of the CGST Rules, 2017 confers jurisdiction on the authority to direct further investigation without imposing any restrictions or limitations. The provision is non-obstante in nature and the authority need not confine itself only to goods or services covered in the original report. The authority itself had recognized this position by directing further investigation based on the respondent's own submission acknowledging that benefits may not have been passed to certain customers. Sub-rule (5) of Rule 133 is merely clarificatory in nature and does not confer additional jurisdiction but reiterates existing powers - Further, the scope of investigation by the investigating authority under Rule 129(2) is very wide and is not limited to goods or services in relation to which a complaint is received. Since the respondent itself invited the direction for further investigation through its own submissions, it cannot later challenge the jurisdiction of the authority to conduct such investigation. Therefore, the first contention of the respondent stands rejected and the authority's order directing further investigation is upheld - The jurisdiction of the erstwhile Anti-Profiteering Authority to direct further investigation into other products is confirmed.rnrn^Validity of Proceedings following omission of Rules constituting Anti-Profiteering Authority without Savings Clause - Rules 122, 124, 125, 134 and 137 of the CGST Rules, 2017 which provided for the constitution, appointment and functioning of the National Anti-Profiteering Authority were omitted vide Notification dated 23.11.2022 without any savings clause. The respondent challenged the validity of proceedings initiated under the earlier authority structure - Whether proceedings initiated by the National Anti-Profiteering Authority become void and non-existent following the omission of the rules constituting the authority without any savings clause – HELD - The omission of the Rules does not render the proceedings non-existent or cause them to disappear from record. While it is true that repeal or deletion of statutory provisions normally obliterates them from the statute book and the operation largely depends on savings clauses, the facts of this case present a different scenario. The Government decision to address illegal profiteering continued even after the Rules were omitted. The Competition Commission of India was subsequently vested with anti-profiteering powers, and later the Principal Bench of the GST Appellate Tribunal was given jurisdiction to examine anti-profiteering matters. This reflects a change in the designated authority rather than abandonment of the anti-profiteering objective. Furthermore, the amended Rule 127 substituted the term "duties" with "functions" and added an explanation defining "authority" as the authority notified under sub-section 2 of Section 171 of the Act. The principles of succession apply to such situations, ensuring that orders passed by the erstwhile authority before omission of rules do not vanish from record. The omission of Rules creating the NAA does not result in nullification of its orders or proceedings - The proceedings initiated and orders passed by the erstwhile NAA are valid and do not become void due to subsequent omission of the rules constituting the authority.rnrn^Applicability of Limitation Period to Anti-Profiteering Proceedings - Respondent contended that proceedings were barred by limitation as the investigating authority did not furnish its report within the time period specified in Rule 133(1) of the CGST Rules, 2017, which mandates that the authority shall decide matters within six months of receipt of the report from the investigating authority - Whether anti-profiteering proceedings are barred by limitation due to non-compliance with the time limit specified in Rule 133(1) for deciding matters – HELD - The Rule 133(1) prescribes a time limit for the authority to decide matters but does not provide any consequences for non-compliance with such time limit. The Delhi High Court in Reckitt Benckiser case has held that since the Rules do not specify consequences for lapse of time limits, the time limits are directory in nature and not mandatory in character. The anti-profiteering provisions in the Act and Rules constitute beneficial legislation designed to promote consumer welfare which must receive liberal construction that favors the consumer and promotes the intent and objective of the Act. If strict adherence to procedural time limits could vitiate the entire proceedings, it would defeat the protective purpose of the legislation - The anti-profiteering proceedings are not barred by limitation, and the time limits specified in the Rules are directory rather than mandatory in nature.rnrn^Applicability of Interest and Penalty - The profiteering period was from 15.11.2017 to 31.01.2018. The provision for imposition of penalty under Section 171(3A) was introduced with effect from 01.01.2020, and the provision for interest under Rule 133(3)(c) was inserted on 28.06.2019 - Whether interest and penalty can be imposed on profiteered amounts when the profiteering occurred in a period prior to the introduction of these provisions – HELD - The respondent is not liable to pay any interest or penalty on the profiteered amount. The provisions for interest and penalty were introduced after the period of alleged profiteering and these provisions apply only prospectively from their date of introduction. Since the profiteering occurred prior to the introduction of both the penalty provision (01.01.2020) and the interest provision (28.06.2019), these provisions cannot be applied retrospectively to the respondent's conduct during the pre-amendment period - The respondent is not liable to pay any interest or penalty on the profiteered amount as the profiteering period predates the introduction of these provisions.rnrn^Whether the anti-profiteering authority must consider commercial, costing and market-related factors while determining whether the benefit of GST rate reduction has been passed on to consumers, or whether it is limited to examining whether the benefit has been commensurate reduction in prices – HELD - The anti-profiteering authority is not concerned with the price determined by the supplier for supply of particular goods or services, exclusive of the GST or input-tax credit component. The supplier is at liberty to set base prices and vary them according to commercial and economic factors. However, the fundamental duty under Section 171 of the CGST Act, 2017 requires that every supplier must pass on the benefit of reduced tax rate and input-tax credit by way of commensurate reduction in prices - The authority is mandated only to ensure that benefits of reduced rates and input-tax credit are passed on; it cannot force suppliers to sell at reduced prices. However, if a supplier fails to pass the benefit to any customer, it cannot claim compliance by passing greater benefits to other customers. Each customer is entitled to receive the benefit of rate reduction - The methodology of comparing average prices of the pre-GST period with actual prices of the post-GST period is permissible and does not constitute an error. The authority correctly adopted this approach to determine the profiteered amount, and the respondent's challenge to the methodology is rejected. The respondent's admission through its own submissions that benefits were not passed on
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