Relief for Tata Play: Delhi HC sets aside Rs 450 Crore Anti-Profiteering Order, Remands Matter to GSTAT [Read Order]
The petitioner had argued that it had not increased its service prices despite a GST rate hike from 15% to 18% and had absorbed the additional tax cost, leaving no scope for profiteering.
The High Court of Delhi, set aside the Rs 450 crore anti-profiteering order against Tata Play and remanded the matter to the Goods and Services Tax Appellate Tribunal (GSTAT).
Tata Play Ltd., petitioner-assessee, offered Direct-to-Home (DTH) services to consumers. The company was alleged to have engaged in profiteering by not passing on the benefit of Input Tax Credit (ITC). The GST regime came into effect on 1st July, 2017, with DTH services initially taxed at 15%, which increased to 18% from 15th November, 2017.
During the same period, GST rates on several other goods and services were reduced, and Anti-Profiteering provisions were introduced to ensure that benefits from lower GST rates or ITC were passed on to consumers. In petitioner’s case, as the GST rate on its services had risen, there was no scope or requirement to pass on ITC benefits.
The Department argued that GST rates on certain inputs had been reduced and that the petitioner should have passed the benefit of the resulting Input Tax Credit to its consumers.
The Coordinate Bench of the Court, in its judgment dated 29th January 2024 in a batch of cases led by Reckitt Benckiser India Pvt. Ltd. v. Union of India (W.P.(C)7743/2019), upheld the constitutional validity of Section 171 of the Act, 2017, and Rules 122, 124, 126, 127, 129, 133, and 134 of the Rules, 2017. The Court clarified that while the provisions were valid, any erroneous exercise of power under the anti-profiteering mechanism could be challenged on merits.
The Court noted that Section 171 allowed the DGAP to examine “any supply of goods or services,” and that consumer ignorance or supply chain complexity could not prevent enforcement of consumer welfare measures. It referred to Supreme Court and Delhi High Court rulings, confirming that investigations could extend beyond the specific complaint.
It was noted that the National Anti Profiteering Authority (NAPA), originally tasked under the Act, had been replaced by the Competition Commission of India in November 2022, with amendments to certain rules. Later, Notification No. 18/2024 (dated 30th September 2024) empowered the Principal Bench of the GST Appellate Tribunal to handle anti-profiteering matters, and Notification No. 19/2024 fixed 1st April 2025 as the cut-off date for accepting complaints.
In the present petitions, the petitioners argued that they had not increased the price of their services despite the GST rate hike. They showed that the additional tax cost was absorbed and input tax credit subsumed, meaning no profiteering occurred.The impugned NAPA order had found profiteering of over Rs 450 crores, based on an investigation report dated 6th August 2021.
Justice Prathiba M Singh and Justice Shail Jain held that the matter required re-examination by the Principal Bench of the GST Appellate Tribunal to determine whether actual profiteering occurred. The impugned order dated 29th August 2022 was set aside, and the petitioners were allowed to submit additional documents or submissions.
The petition challenging the SCN (W.P. (C) No. 8705 of 2022) was disposed of as infructuous, and the Court directed that a copy of the order be communicated to the Registrar of the Principal Bench, GST Appellate Tribunal.
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