Facts of the Case: The DGAP initiated anti-profiteering investigation under Section 171 of the CGST Act, 2017 against M/s Puma Realtors Pvt. Ltd. for alleged failure to pass on the benefit of Input Tax Credit (ITC) to buyers. During pendency, the company was declared insolvent. A consortium (M/s APM Infrastructure Pvt. Ltd. and M/s Once City Infrastructure Pvt. Ltd.) took over the corporate debtor pursuant to the Resolution Plan approved by NCLT, Delhi on 01.06.2021.

Since the investigation could not be completed due to non-submission of documents by Puma Realtors, the DGAP sought legal opinion whether the Resolution Applicant could still be held liable under Section 171.

Issue: Whether a Resolution Applicant can be held accountable for the profiteering liability of the erstwhile corporate debtor, when such claims were not included in the Resolution Plan.

Held that:

The GSTAT, Delhi held as under:

• By virtue of Section 238 IBC, insolvency provisions prevail over inconsistent laws. Once a resolution plan is approved under Section 31 IBC, all claims not included in the plan stand extinguished. The Resolution Applicant cannot be burdened with “undecided” claims
• Following Ghanashyam Mishra (SC), even statutory dues of governments and authorities not forming part of the resolution plan are wiped out.
• Since the claim of passing on ITC benefit was neither quantified nor included in the resolution plan, it stood extinguished. The Resolution Applicant could not be held responsible for acts of the erstwhile corporate debtor.

The Tribunal accordingly closed the anti-profiteering proceedings and set aside the DGAP’s notice.

This ruling confirms that Section 171 liabilities are treated like any other claim under insolvency law. Once a resolution plan is approved, even consumer-centric statutory obligations, such as passing on ITC benefits cannot survive outside the plan. The decision harmonizes GST enforcement with the “fresh start” principle of IBC, ensuring certainty for Resolution Applicants and preventing open-ended liabilities from resurfacing post-resolution.

Case Name: DGAP v. Puma Realtors (P.) Ltd., Oreo City dated 26.08.2025

To read the complete judgment 2025 Taxo.online 2161