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Penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively.

Anti-Profiteering — Section 171 of the CGST Act, 2017— The DGAP submitted its report after a detailed investigation under Rule 129 (6). An application was filed before the Karnataka State Screening Committee on Anti-profiteering by the Applicant alleging profiteering by the Respondent in respect of purchase of Apartment No. Emerald-002, in the Respondent’s project “PARKWEST-EMERALD”, situated at 1 & 1, 1, Hosakerehalli Main Road, Binnyfields, Binny Pete, Jagajeevanram Nagar, Bengaluru, Karnataka. It is also alleged that the Respondent had not passed on the benefit of ITC to him, on implementation of the GST in terms of Section 171 (1). The DGAP has concluded that the benefit of additional ITC during the post-GST period from 01.07.2017 to 30.04.2019 had not been commensurately passed on. The Respondent had realized an excess amount of Rs. 3,13,61,443/- on the projects which included both the profiteered amount on the basic prices and GST.
Held that:- The Hon’ble Anti-Profiteering Authority held that the Respondent has benefited from the additional ITC, which he was required to pass on to the buyers of the flats by commensurately reducing the prices of the flats. The Authority directed that the Respondent shall reduce the prices to be realized commensurate with the benefit of ITC received by him. The respondent has committed an offence under Section 171(1) during the period from 01.07.2017 to 30.04.2019 and liable for penalty. But the provisions of Section 171(3A) under which penalty has been prescribed for the above violation shows that it has been inserted w.e.f. 01.01.2020 and it was not in operation during the period from 01.07.2017 to 30.04.2019. Hence, the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively.—Venugopal Celia, Mr. Sanjay Mehta, Director General of Anti-Profiteering, Central Board of Indirect Taxes & Customs Vs. Shapoorji Palonji, Legal Name: Relationship Properties Pvt. Ltd. [2020] 27 TAXLOK.COM 088 (NAPA)