2026-VIL-1105-DEL
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SGST High Court Cases

GST - Anti-Profiteering - Methodology for Determination of Profiteering Benefit in Real Estate Projects - Treatment of Unavailed Pre-GST CENVAT Credit - Petitioner's residential project was subjected to profiteering proceedings under Section 171 of the CGST Act, 2017 - Remand order directing recomputation of the total savings on account of introduction of GST divided by total area - DGAP recalculated the profiteered amount by determining the additional input tax credit availed post-GST as against the purchase value of goods and services, apportioning the resultant saving over the project area and sold area, and adding GST and interest thereon, which determination was upheld by the GSTAT - Whether the methodology adopted on remand, and the treatment of pre-GST CENVAT credit which was legally available to the petitioner on input services but not actually availed, is sustainable - HELD - The methodology adopted after remand, which determined the total saving at the project level by reference to the purchase value of goods and services and thereafter divided the saving by the total project area to arrive at a per square feet figure applied to the sold area, was materially different from the ratio of ITC to turnover methodology earlier found to be flawed, and consistent with the binding direction in Reckitt Benckiser case to calculate total project savings and distribute the same on a per square feet basis - The distinction between eligibility and actual availment of credit is material. The relevant enquiry under the anti-profiteering provision is the benefit of ITC actually accruing to the supplier and required to be passed on, and not whether a credit could theoretically have been availed had the assessee acted differently in the pre-GST period - Since the statutory returns for the pre-GST period reflected nil credit actually availed, the tax paid on input services constituted a cost during that period. The ITC actually availed after introduction of GST cannot be excluded merely because a corresponding credit was legally available but not utilised earlier - The contention that only credit relatable to goods and not services could constitute the benefit was not sustainable, as the distinction between goods and services is not determinative of the total additional credit actually availed after introduction of GST - Addition of tax on the additional realisation to the profiteered amount, and the direction for payment of interest, followed the governing precedent and the statutory scheme. A mere disagreement with the methodology or appreciation of material, where the methodology is within the parameters laid down by binding precedent and the contentions were duly considered, does not constitute a ground for interference in writ jurisdiction – The petitioner has failed to establish any ground warranting interference with the impugned order passed by GSTAT – The writ petition is dismissed
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