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IN THE HIGH COURT OF DELHI AT NEW DELHI

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W.P.(C) 12557/2022

L OREAL INDIA PRIVATE LIMITED

..... Petitioner

Through:

Mr.Mukul Rohatgi, Sr.Advocate with

Mr.V.Lakshmikumaran, Mr.Karan

Sachdev and Mr.Agrim Arora,

Advocates.

versus

UNION OF INDIA & ORS.

..... Respondents

Through:

Ms.Uma Prasuna Bachu, Advocate

for R-1.

Mr.Zoheb Hossain, Sr.Standing

Counsel for the Revenue with

Mr.Vivek Gurnani and Ms.Niharika

Kuchhal, Advocates for R-2, 3 &

4/NAA and DGAP.

%

Reserved On

: 02^ndSeptember, 2022

Date of Decision: 06^thOctober, 2022

CORAM:

HON'BLE MR. JUSTICE MANMOHAN

HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

J U D G M E N T

MANMOHAN, J:

CM APPL.38028/2022

Exemption allowed, subject to all just exceptions.

Accordingly, the present application stands disposed of.

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/004085

CM APPL.38027/2022

1.

Accompanying writ petition has been filed challenging the order

dated 23^rdJune, 2022 passed by the Respondent No.2 in order No. 26/2022

and

the notice dated 1^stJune, 2022. Petitioner also seeks to challenge

Section 171 of the CGST Act, Chapter XV of the CGST Rules, more

particularly, Rules 126, 127 & 133 of the CGST Rules as unconstitutional,

ultra vires and violative of Articles 14, 19(1)(g), 265 & 300A of the

Constitution of India.

2.

Learned senior counsel for the petitioner submitted that the National

Anti-Profiteering Authority (NAA) has no suo moto powers and therefore,

the application filed by the Secretary, NAA, to the Standing Committee

seeking initiation of proceedings under Section 171, is not a valid initiation

of proceedings against the petitioner for examining whether there is any

profiteering or not.

3.

He contended that NAA is not netting of the benefit of rate reduction

extended in some products as against those where the petitioner has not

extended the benefit of rate reduction qua the subject products, by way of

commensurate reduction in prices, and therefore, while it is being punished

for being a ‘bad boy’, it is not being rewarded for being a ‘good boy’.

4.

He stated that even though in some products they have not been able

to grant commensurate reduction in prices, yet they have tried to pass on the

benefit by way of increase in grammage of the product.

5.

He also stated that petitioner has given post sale discount (Ex.GST) to

the tune of Rs.73.59 crores, and therefore, this amount should be reduced

from the total profiteered sum.

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/004085

6.

Learned senior counsel for the petitioner further contended that

increase of customs duty on certain products should be excluded. In support

of this argument, he gave certain illustrations from which it could be seen

that when compared the invoices issued during the period 15^thNovember,

2017 to 30^thNovember, 2017 with the invoice raised in the month of March

2018, the actual sale price per unit including GST had remained same during

both periods. He also prayed that the profiteering on account of GST

collected by him, should be excluded.

7.

Per contra, learned counsel for NAA contended that Section 171 of

GST confers powers of wide amplitude upon the NAA to examine “any

supply of goods or services” by any registered person and to examine

whether the reduction in the tax rate or benefit of input tax credits have been

passed on to the recipient by way of commensurate reduction in prices or

not. He stated that even assuming that the rules provide for a mechanism by

which a recipient or any other interested party or a Commissioner, can make

a written application in a prescribed form which is required to be examined

by the Standing Committee and the Screening Committee, however, this

procedure in no way fetters the original power conferred upon the NAA by

Section 171, to examine whether input tax credits availed by any registered

person or the reduction in the rate of tax on any supply of goods or services,

have been passed on to the recipient by way of comme