The National Anti-Profiteering Authority (NAA) found M/s Horizon Projects Pvt. Ltd. guilty of profiteering but did not impose the penalty for denying the benefit of Input Tax Credit (ITC) as no penalty provisions existed when the ITC was denied.
The Applicant, Diwakar Bansal, alleged profiteering against the respondent, M/s Horizon Projects Pvt. Ltd. that the respondent had not passed on the benefit of Input tax Credit (ITC) to the Applicant in respect of the buyers of the flat with effect from July 2017 to June 2018, as per the provisions of Section 171 (1) of the CGST Act, 2017.
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 with effect from January 1, 2020, by inserting Section 171(3A).
The Authority headed by the Chairman Dr. B.N. Sharma held that since no penalty provisions were in existence between the period with effect from July 1, 2017, to March 30, 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the notice dated December 18 2019 issued to the Respondent for imposition of penalty under Section 171(3A is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped,” the NAA noted.
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