Delhi HC issues notice to CCI on GST profiteering quantum
The Delhi High Court (HC) issued notices to the Competition Commission of India (CCI). The High Court has asked CCI to rely on the prescribed methodology that has been devised to judge the quantum of profiteering. The High Court issued notices with respect to a show cause notice issued by CCI to determine profiteering by a real estate company for a particular real estate project.
The Delhi High Court has given four weeks time to CCI to respond to the notices.
CCI is the authority now appointed to determine profiteering after it gets a detailed report from the Director General for Anti Profiteering (DGAP). Prior to the appointment of the CCI, National Anti-Profiteering Authority had been in existence to hear matters on complaints filed by citing profiteering under the GST rules.
The real estate company – Salarpuria Group, which claims to have a presence in eight cities and has completed 140 completed projects and is currently working on 24 under-construction projects, had questioned the quantum of profiteering being calculated and presented in the show cause notice issued by CCI, in absence of any given formula in the prescribed methodology.
The Delhi HC was hearing this matter between Salarpuria Group’s project Salarpuria Signum and Union of India, CCI and others.
Abhishek A Rastogi, founder of Rastogi Chambers, while arguing for the petitioners raised the issue and questioned the constitutional validity of the anti-profiteering provisions in the absence of methodology.
DGAP had concluded that the developer will be liable for Anti Profiteering with respect to a joint development transaction.
The show cause notice has been issued for determining the profiteering with respect to the transaction between the land owner and the developer, the transaction between the developer and the home buyers and thirdly the transaction between the landowner and the homebuyers.
The counsel for the petitioner, Abhishek A. Rastogi, questioned that the methodology issued by CCI is not sufficient to determine the quantum of profiteering and hence the proceedings may be meaningless in the absence of such a methodology.
Justice Vibhu Bakhru and Justice Amit Mahajan have now listed the matter for next hearing after six weeks.
To watch out for is the response by CCI and how this matter sets a precedence for the other pending profiteering matters before several courts.
Source: CNBC TV 18