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M/S Airmid Real Estate Ltd vs Union Of India & Ors on 4 November, 2022

Author: Manmohan

Bench: Manmohan, Dinesh Kumar Sharma

                              $~SB-1
                              *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                              +     W.P.(C) 14835/2022 & CM APPL. 45632/2022
                                    M/S AIRMID REAL ESTATE LTD.                   ..... Petitioner
                                                    Through: Mr.Tarun Gulati, Sr.Advocate with
                                                              Mr.Kishore   Kunal,       Mr.Manish
                                                              Rastogi and Ms.Ankita Prakash,
                                                              Advocates.
                                                    versus

                                    UNION OF INDIA & ORS.                            ..... Respondents
                                                  Through:          Mr.Rajesh Kumar, Advocate with
                                                                    Ms.Mishika Pandita, Advocate for
                                                                    UOI.
                                                                    Mr.Zoheb    Hossain,     Sr.Standing
                                                                    Counsel with Mr.Vivek Gurnani and
                                                                    Ms.Niharika Kuchhal, Advocates for
                                                                    NAA and DGAP.
                                    CORAM:
                                    HON'BLE MR. JUSTICE MANMOHAN
                                    HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
                                                 ORDER

% 04.11.2022 Present writ petition has been filed challenging the order dated 24th June, 2022 issued by the Respondent No. 2 and the consequential demand notice dated 18th August, 2022 issued by the Respondent No. 7. Petitioner also seeks to challenge Section 171 of the CGST Act and the Rules under Chapter XV of the CGST Rules particularly Rules 126, 127 and 133 as unconstitutional being violative of Articles 14 and 19(1)(g) of the Constitution of India. Petitioner further seeks a direction holding that the composition of Respondent No.2 under Rule 122 of the CGST Rules is unconstitutional and bad in law.

Learned senior counsel for the Petitioner states that vide the impugned order and the consequential demand notice dated 18th August, 2022 issued by the Respondent No.7, the Petitioner has been directed to pay the amount of Rs. 6,46,06,227/- along with interest at the rate of 18% held to be profiteered in respect of its project "Sierra-Vizag" in Vishakhapatnam.

Learned senior counsel for the Petitioner states that as far as the Petitioner is concerned, the price at which the units were booked by various customers was a negotiated price which cannot be uniformly made applicable to all the customers. He submits that the Respondents are seeking to interfere with such negotiated price which is contrary to the freedom of trade granted to the Petitioner by the Constitution. He states that the Respondents have completely ignored that there are several considerations for deciding the pricing of the units which are sold to the buyers. He states that the pricing is also driven by market forces and demand and supply considerations as well as price of the land.

Learned senior counsel for the Petitioner states that the Respondent No. 3 in its investigations has, for the first time, provided a completely arbitrary formula, which has no sanction in law, to compute how benefits are to be determined. He submits that in the real-estate sector, there is no co- relation between the turnover and the cost of construction / development of the project. He states that the turnover reflects the amount collected by the Petitioner developer as per the payment or booking plans, which is totally market driven.

Issue notice.

Mr.Rajesh Kumar, Advocate and Mr.Zoheb Hossain, Advocate accept notice on behalf of UOI and NAA & DGAP respectively. Let counter Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:09.11.2022 20:25:09 affidavits be filed within three weeks. Rejoinder affidavits, if any, be filed before the next date of hearing.

Keeping in view the orders passed by this Court in Phillips India Limited Vs. Union of India & Ors. [W.P.(C) No.3737/2020] as well as M/s Samsonite South Asia Pvt. Ltd. Vs. Union of India & Ors. [W.P.(C) No.4131/2020] and M/s Patanjali Ayurved Ltd. Vs. Union of India & Ors. [W.P.(C) No.4375/2020], this Court directs the petitioner to deposit with the Registry of this Court the principal profiteered amount of Rs5,76,84,131/- (Rs.6,46,06,227/- minus Rs.69,22,096/- being the GST amount already deposited by the petitioner) in six equated monthly installments commencing 15th November, 2022. The amount deposited by the petitioner shall be kept by the Registry in an interest bearing fixed deposit. Needless to state that the amount deposited by the petitioner shall be abide by further orders to be passed by this Court.

The interest amount directed to be paid by the respondents by way of the impugned order is stayed till further orders. Accordingly, CM Appl. 45632/2022 stands disposed of.

Learned counsel for the parties are directed to file their short written submissions not exceeding three pages each at least one week prior to the next date of hearing.

List on 6th and 7th December, 2022.

MANMOHAN, J DINESH KUMAR SHARMA, J NOVEMBER 04, 2022/TS Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:09.11.2022 20:25:09