In yet another move by industry challenging the anti-profiteering norms under the ambit of Goods and Services Tax, the Supreme Court issued notices to the Union Finance Ministry, the Central Board of Indirect Taxes and Customs (CBIC), the Goods and Services (GST) Council and the National Anti-Profiteering Authority (Now subsumed under the Competition Commission of India) to reply on the claims of the constitutional validity of the anti-profiteering norms.

The apex court issued notices taking cognizance of petitions filed by real estate firms namely Swati Realty and Manas Developers, which have moved the top court challenging a Delhi High Court verdict, upholding the constitutional validity of anti-profiteering provisions.

According to a Special Leave Petition (SLP) by Swati Realty and Manas Developers, the High Court failed to appreciate the impugned provisions under the GST system, which the firm claims are unconstitutional.

Delhi High Court had earlier decided on the constitutional validity of the anti-profiteering provisions and had held such provisions to be constitutionally valid. The moot point before the Delhi High Court was with respect to the absence of any methodology and in such a situation, it was difficult for the businesses to determine the quantum of profiteering as the National Anti-Profiteering Authority had used different methods and mechanisms to compute Profiteering for different sectors.

Interestingly, while the Delhi High Court in January had upheld the constitutional validity of the anti-profiteering provisions, the order of the Delhi High Court was in favour of the real estate sector as the order very categorically mentioned that the methodology used by the National Anti-Profiteering Authority with respect to the input tax credit ratios for the erstwhile period and the GST period, appears to be not appropriate, keeping in mind the business of the real estate sector.