The National Anti-profiteering Authority (NAA) vide its order dated March 12, 2020 had held that Patanjali Ayurved Ltd denied to its customers the benefits of reduction in GST between November 2017 to March 2019 of Rs 75 crore. Against said order, Patanjali Ayurved had filed a writ before the Delhi High Court.
The Delhi High Court on Friday stayed the penalty proceedings initiated against Patanjali Ayurved Ltd for allegedly profiteering Rs 75 crore. The stay is however subject to the condition that it deposits the amount in question in the consumer welfare fund in six monthly installments.
The petitioner company viz Patanjali Ayurved Ltd had in its writ contended that in the absence of a methodology the entire proceeding before the National Anti Profiteering Authority (NAA) is in breach of natural justice and violative of Articles 14 and 19(1)(g) of the Constitution. It was pointed out that in thirty-five similar matters this Court has issued notice and listed the matters for hearing on 24th August 2020.
According to Patanjali Ayurved Ltd, it passed on the benefit in tax reduction to consumers worth over Rs 151 crore to the consumers by various means, including cashback schemes, discounts through secondary and retailer schemes, and not increasing the selling price of certain items even after an increase in the tax rate. However, without appreciating these claims, NAA held that it has profiteered an amount of Rs.75,08,64,019 and had directed that it be deposited in the consumer welfare fund.
Learned senior counsel for the petitioner stated that the petitioner is willing to deposit ten per cent of the remaining amount of the tax in accordance with Section 107(6)(b) of the CGST Act, 2017.
Order of Delhi High Court:
Keeping in view the orders passed by this Court in Phillips India Limited vs. Union of India & Ors. and M/s. Samsonite South Asia Pvt. Ltd. vs. Union of India (supra) as well as the fact that no ground of financial hardship has been pleaded in the present writ petition, this Court directs the petitioner to deposit the principal profiteered sum i.e. Rs. 75,08,64,019/ and that too in six equated monthly instalments commencing 15th August, 2020 keeping in view the COVID-19 pandemic situation.
The interest amount as well as the penalty proceedings initiated by the respondent authority stay till further orders.
The High Court tagged all similar matters for hearing together on August 24.
The Delhi High Court also issued notice to the Centre, National Anti-Profiteering Authority (NAA) and the Director-General of Anti Profiteering (DGAP) seeking their stand on the company’s plea which has claimed that NAA “failed to appreciate” that Patanjali Ayurved Ltd has passed on benefits worth over Rs 151 crore to the consumers.
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