The Delhi High Court directed the petitioner, Gaurav Sharma Food Industry to deposit principal profiteered amount but stayed interest and penalty imposed by National Anti-Profiteering Authority (NAA).
The petitioner filed the writ petition challenging the order of NAA wherein it was held that the petitioner profiteered Rs.7,53,854 and imposed penalty as well as interest on the principal amount.
The NAA held that the Gaurav Sharma Food Industry has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, he is liable to penal action under the provisions of the above Section.
The petitioner prays for a declaration that Section 171 of CGST Act and Chapter XV of the CGST Rules are arbitrary, discriminatory, and unconstitutional for being in violation of Articles 14, 19(1)(g), 50, 256 and 300A of the Constitution of India as well as for a declaration that Rule 123, 129 and 133(3) of the CGST Rules are ultra vires the provisions of the CGST Act itself.
It is further prayed for a declaration that the aforesaid provisions are inapplicable to the post transition period i.e. after 1 July, 2017 for being contrary to the very purpose with which these provisions were introduced under the CGST Act and rules.
Due to COVID-19 pandemic, the petitioner further prayed before the court to allow the deposit the aforesaid amount in installments.
The division judge bench of Justice Manmohan and Justice Sanjeev Narula in the light of various precedents directs the petitioner to deposit the principal profiteered amount i.e. Rs.7,53,854/- and Rs.35,898 in six equated monthly installments commencing 30th September, 2020.
However, the interest amount directed to be paid by the respondents authority as well as penalty proceedings were stayed by the court till further orders.
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