Whirlpool of India Ltd Vs. Union of India & Ors.

The petition has been expeditiously listed before this Bench by the Registry, responding to the urgency expressed therein, and has been conducted via video conferencing for expediency and accessibility. The present writ petition challenges both an interim order dated 25th June 2019 and a subsequent order dated 16th June 2020 issued by the National Anti-Profiteering Authority (“Authority”) under the Central Goods and Services Tax Act, 2017 (“CGST Act”). These orders assert that the petitioner, in the sale of its refrigerator model Whirlpool FP313D PROTTON ROY MIRROR, violated Section 171 of the CGST Act by profiteering. The Authority, in its directives, mandates the petitioner to lower the price of the refrigerator and deposit an amount totaling Rs. 4,07,451/- within a strict three-month timeline from the date of receiving the order, coupled with an interest charge of eighteen percent calculated from the date of collection from recipients until the deposit date.

In addition to contesting the substance of the profiteering allegations, the petitioner fervently challenges the procedural propriety of the Authority’s actions. Central to their plea is a writ of prohibition sought against the Authority’s directive, as per the impugned order, to expand the investigation beyond the initial findings on the Whirlpool refrigerator to include “other impacted products”. This expansion, the petitioner contends, is not only unwarranted but also procedurally flawed, as evidenced by subsequent communications dated 02nd July 2020 and 23rd July 2020 from the Director General of Anti-Profiteering (“DGAP”). These communications, viewed by the petitioner as extensions of the Authority’s overreach, demanded additional details and documents for the investigation of these allegedly impacted products by a specified deadline of 12th August 2020.

The issuance of notice in response to this petition has been duly acknowledged by learned counsels representing respondents No. 1 to 3, who are led by Mr. Ravi Prakash, and respondents No. 5 to 7, represented by Ms. Vipasha Mishra. Ms. Mansie Jain, representing respondent No. 8, also acknowledged the notice. These respondents have been granted a reasonable period of four weeks to file their comprehensive counter-affidavits, setting the stage for a thorough legal examination of the issues at hand.

The petitioner’s arguments, articulated by learned senior counsel, assert multifaceted grounds for challenging the impugned orders and the subsequent actions of the DGAP. They contend that the retrospective application of Rule 133(5) by the Authority is untenable, highlighting purported errors in the consideration of relevant materials and the reliance on irrelevant factors in reaching adverse conclusions. Moreover, the petitioner vigorously contests the application of sub-rule (3) of Rule 133, emphasizing its erroneous application, and asserts that the subsequent issuance of notices beyond the initial order’s scope impermissibly extends the scope of the investigation.

The overarching legal argument advanced by the petitioner hinges on the interpretation of statutory provisions within the CGST Act and associated Rules, particularly Rules 126, 127, and 133, which they deem null and void and violative of fundamental rights enshrined under Articles 14 and 19(1)(g) of the Constitution of India. Rule 129 of the CGST Rules also comes under sharp scrutiny, with the petitioner asserting its nullity for purportedly violating principles of natural justice.

Conversely, the counter-arguments presented by the learned counsel for the Authority and the DGAP underscore the expansive powers vested in the Authority under Section 171 of the CGST Act. They vehemently contend that the statutory framework provides the Authority with wide-ranging powers to scrutinize any supply of goods or services to ensure compliance with the provisions governing the passing on of benefits derived from tax rate reductions or input tax credits to consumers through commensurate reductions in prices.

They refute the petitioner’s contention regarding the lack of suo motu powers of the Authority, arguing that Section 171, read in conjunction with relevant rules, empowers the Authority to initiate investigations based on complaints, applications, or its own scrutiny in the public and consumer interest. They stress that the statutory provision’s use of the term “any” demands a broad interpretation, underscoring the Authority’s mandate to examine all supplies without exception.

Moreover, the respondents highlight procedural safeguards within the CGST Act and Rules, asserting that while mechanisms exist for complaints and applications to trigger investigations through prescribed forms and committees, these do not curtail the Authority’s inherent powers under Section 171. They dismiss the petitioner’s characterization of the procedural steps as fetters on the Authority’s powers, reaffirming that such measures are intended to ensure transparency and adherence to due process, thereby safeguarding the rights of all parties involved.

As this matter progresses, it is evident that the issues raised are of significant legal and constitutional importance, warranting a comprehensive examination of statutory interpretation, procedural fairness, and the extent of regulatory powers conferred under the CGST Act. The judicial scrutiny of these issues, through the present writ petition, seeks not only to redress the specific grievances of the petitioner but also to establish precedents that uphold the principles of equity, justice, and constitutional rights in the realm of GST compliance and enforcement.

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