Scope of Investigation of National Anti-Profiteering Authority

Case Details:

Issue- In the above case, the petitioner has challenged a notice issued by the National Anti-Profiteering Authority (Authority)/R1 dated 10-7-2020 in consequence of a Report of the Director General of Anti-Profiteering (DGAP)/R2 dated 1-7-2020. The petitioner, a trader in goods viz., dental equipment and accessories, challenges the aforesaid order on various ground, specifically, that the power of suo moto investigation in terms of Rule 133 of the Central Goods and Service Tax Rules, 2017 (‘CGST Rules’) was available to the Authority only with effect from 28-6-2019.

Held- It was held that on the question of retrospectivity, reliance is placed on the judgements in (i) Union of India v. Sukumar Pyne [1966] 2 SCR 34 and (ii) Memon Abdul Karim Haji Tayab Central Cutlery Stores Veraval v. Dy. Custodian General [1964] 6 SCR 837. Both judgments are cited in support of the position that the insertion of rules 133(4) & (5)(a) is only in aid of procedure and hence are applicable retrospectively. The provisions of section 171 of the CGST Act compare well with the spirit and intention of Section 18, though perhaps not the language. The Competition Act addresses anti-competitive agreements and has a laudable purpose behind it. The object is to ensure healthy competition in the market as it is expected to bring about various benefits for the public as well as the economy. This is similar to the Anti-profiteering provision and the spirit and object behind its insertion. The distinction sought to be made by the petitioner is thus rejected. The cases relied upon by the petitioner are distinguishable for this reason.  I am thus of the considered view that the ratio of the judgements discussed in the proceeding paragraphs are applicable in the context of Section 171 of the GST Act as well. In light of the discussion as above, as well as for the reason that the issue to be decided is a legal issue untrammeled by any dispute on facts, the preliminary objection on maintainability is rejected. The assumption of jurisdiction by the respondents is upheld. Coming to impugned notice dated 10-7-2020, the Authority has called upon the petitioner, based upon report of the DGAP dated 1-7-2020 to show cause why the aforesaid report not be accepted and the petitioner’s liability for profiteering determined. The petitioner is thus at liberty to comply with the directive under the impugned notice, put forth its explanation in writing within a period of three (3) weeks from date of uploading of this order in the official website of this Court, appear before the Authority on a date to be fixed by the authority per mutual convenience of the parties and contest the findings and conclusion in the report of the DGAP dated 1-7-2020. After hearing the petitioner, the Authority shall pass a speaking order in accordance with law, as expeditiously as possible as Barring the aspect of assumption of jurisdiction that has been held adverse to the petitioner, both parties are at liberty to pursue all lines of argument as they believe are available to them and nothing contained in this order shall stand in the way of a de novo hearing on the merits of the matter, with all issues left open, for decision afresh.