The National Anti-Profiteering Authority (NAA) found M/s Puri Construction Private Limited guilty of profiteering but did not impose the penalty for denying the benefit of Input Tax Credit (ITC) to Flat Buyers as no penalty provisions existed when the ITC was denied.
The Applicant, Pallavai Gulati, alleged profiteering against the respondent, M/s Puri Construction Private Limited and submitted that the respondent had not passed on the benefit of additional Input Tax Credit (ITC) to the Applicant as well as other buyers who had purchased them in his Project “Anand Vilas”, as per the provisions of Section 171 (1) of the CGST Act, 2017.
The DGAP in his report had also submitted that the Respondent had denied the benefit of ITC to the buyers amounting to Rs.1,01,09,773 pertaining to the period with effect from July 2017, to June 2018, and had thus indulged in profiteering and violation of the provisions of Section 171 (1) of the Act.
The Authority headed by the Chairman Dr. B.N. Sharma held that Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come into force w.e.f. 01.01.2020, by inserting Section 171(3A).
“Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.06.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 15.05.2019 issued to the Respondent for imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped,” the NAA said.
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