Today, 19th April, The Supreme Court issued notices regarding a petition challenging anti-profiteering measures. The petition questions the validity of these measures and their impact on businesses. This development signals potential legal scrutiny of anti-profiteering regulations in India. It reflects ongoing debates surrounding pricing policies and consumer protection laws.
New Delhi: On Friday, the Supreme Court sent official notices to the central government, the Central Board of Indirect Taxes and Customs (CBIC), the Goods and Services (GST) Council, and the National Anti-Profiteering Authority (whose functions have been assumed by the Competition Commission of India).
These notices issued in response to a petition filed by Swati Realty, a real estate company, challenging a verdict by the Delhi High Court that upheld the constitutional validity of anti-profiteering provisions. In its petition, Swati Realty argues that the high court made a mistake by not recognizing that the challenged provisions within the GST system go against the powers granted by the Constitution.
In February, the Supreme Court previously sent a notice to the Union government regarding the same issue in a different petition.
Abhishek Rastogi, the founder of Rastogi Chambers and the advocate representing the real estate player in the Supreme Court, stated that the Delhi High Court agreed with the arguments presented by the real estate companies that the approach taken by the National Anti-Profiteering Authority (NAA) flawed. This is due to the fact that in the real estate sector, there no direct connection between the overall revenue and the Input Tax Credit (ITC) utilized during a specific period.
He emphasized that considering this finding by the high court, it becomes crucial for the Supreme Court to determine the constitutional validity of the anti-profiteering provisions specifically for the real estate players.
Abhishek Rastogi stated,
“In light of this observation made by the high court, it is imperative that even the constitutional validity is decided by the apex court for the real estate players.”
The National Anti-Profiteering Authority (NAA) established in November 2017 with the aim of ensuring that companies pass on the benefits of Input Tax Credit (ITC) and GST reduction to consumers through price reductions.
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Since December 2022, the Competition Commission of India been investigating complaints of profiteering against companies. In January, the Delhi High Court upheld the constitutional validity of the anti-profiteering provisions.
Over 100 companies, including Hindustan Unilever, Patanjali, Jubilant Foodworks, and Phillips, filed petitions against these provisions in the high court. The court ruled that these provisions in the public interest as they relate to a proportional reduction in prices when GST rates lowered or due to the utilization of ITC.
The court concluded that these provisions aligned with the legislative powers granted under the Constitution.