Penalty imposed on Non-Passing of benefit of Tax Reduction is not violative of Right to Trade: NAA [Read Order]

The penalty imposed by the National Anti-Profiteering Authority (NAA) on non-passing of the benefit of tax reduction is not violative of the fundamental right i.e. Right to Trade/ Business Decision.

The anti-profiteering watchdog was considering an application filed by the Deputy Commissioner of State Tax and Director General of Anti-Profiteering against M/s Le Reve Pvt. Ltd.

The respondent claimed that right to trade was a fundamental right guaranteed under Article 19(1)(g) of the Constitution of India and the right to trade includes the right to determine prices and such right which had been granted by the Constitution of India could not be taken away without any explicit authority under the Law. It was also their contention that the National Anti-Profiteering Authority (NAA) is not empowered to create any hindrance in the fundamental right of the citizens of India.

The respondent also stated that steps for the price control are violative of a fundamental right as Director-General of Anti-Profiteering and this authority is not empowered to adjudicate on such matters.

While addressing the issue that whether the National Anti-Profiteering Authority (NAA) is violating the rights of the business persons or not, the bench consisting of Chairman, B.N. Sharma; Technical Members, J.C. Chauhan, and Amand Shah held that Under Section 171 this Authority has only been mandated to ensure that both the benefits of tax reduction and ITC which are the sacrifices of precious tax revenue made from the kitty of the Central and the State Governments are passed on to the end consumers who bear the burden of the tax.

Based on the above findings, the authority also observed that it has not interfered with the business decisions of the Respondent and therefore, there is no violation of Article 19 (1) (g) of the Constitution.