Facts of the Case:

The proceedings originated from a complaint filed by homebuyers alleging profiteering by the developer.  The complainants contended that although the Respondent had charged GST at the effective rate of 12% after implementation of GST, it failed to pass on the benefit of additional Input Tax Credit (ITC) by way of commensurate reduction in price as mandated under Section 171 of the CGST Act, 2017.

The complaint was referred by the Standing Committee on Anti-Profiteering to the Director General of Anti-Profiteering (DGAP) for investigation. The matter was investigated by the DGAP, which initially computed profiteering at a higher amount. Subsequently, following remand proceedings and the revised methodology prescribed by the Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India, the DGAP recalculated the profiteered amount at Rs. 63,93,233/- including GST for nine eligible homebuyers.

The developer challenged the proceedings on grounds relating to limitation, levy of interest, inclusion of GST in profiteering computation, and penalty. The Tribunal rejected the objections and directed refund of the profiteered amount along with interest and applicable penalty.

Issue:

Whether the reference made by the Standing Committee to the DGAP beyond the period prescribed under Rule 128 of the CGST Rules vitiated the anti-profiteering proceedings. Whether interest at 18% under Rule 133(3)(b) could validly be imposed despite Section 171 not expressly providing for interest. Whether penalty under Section 171(3A) was leviable for profiteering continuing after 01.01.2020.

Held That:

The Tribunal rejected the Respondent’s challenge regarding limitation and held that the timelines prescribed under Rule 128 are directory and not mandatory. It observed that anti-profiteering provisions constitute beneficial consumer welfare legislation and procedural delay by statutory authorities cannot defeat substantive consumer rights, particularly when the Rules do not prescribe any consequence for delay. Reliance was placed on the Supreme Court decision in T. Rajan v. T.P.M. Sahir and the Delhi High Court ruling in Reckitt Benckiser India Pvt. Ltd. v. Union of India.

On the issue of inclusion of GST in the profiteered amount, the Tribunal held that the Respondent had collected consideration inclusive of GST from homebuyers and, by not passing on the ITC benefit, had effectively retained the GST component as well. The Tribunal observed that the Governments had sacrificed tax revenue for consumer benefit and therefore GST collected on the inflated consideration also formed part of profiteering. Accordingly, the total profiteered amount including GST was directed to be refunded.

The Tribunal further upheld the levy of interest at 18% under Rule 133(3)(b), holding that Section 171 is broad enough to empower the Government to prescribe interest and penalty provisions to ensure effective deterrence against profiteering. It rejected the Respondent’s argument that the interest provision was retrospective, observing that Rule 133(3)(b) already existed prior to Notification No. 31/2019-Central Tax dated 28.06.2019. Consequently, interest was held payable from the date of collection of the excess amount from homebuyers till actual refund.

The Tribunal ultimately accepted the DGAP’s report and directed refund of Rs. 63,93,233/- along with interest at 18% per annum to the eligible homebuyers.

Case Name: DG Anti Profiteering, Director General of Anti-Profiteering, DGAP Versus Siddha Infradev. dated 20.05.2026

To read the complete judgement 2026 Taxo.online 1393