Petitioners argue against validity of anti-profiteering provisions at HC

They say the provision of interest is there in the rules under the Central GST Act, but it absent in the legislation itself

Petitioners in Delhi High Court on Thursday argued against the issue of imposing interest on companies for delayed payment of profiteered amounts calculated by the national anti-profiteering authority (NAA) under the goods and services tax (GST) regime.

In a case relating to constitutional validity of anti-profiteering provisions, petitioners said the provision of interest is there in the rules under the Central GST Act, but it is not there in the legislation itself.

Since interest is not provided for in the statute, it cannot be imposed, they argued.

"...The moot point is whether interest is applicable in the absence of statutory provision," said Abhishek Rastogi, partner at Khaitan & Co., who is arguing petitions for real estate, food and beverages and FMCG sector.

About 51 companies have filed petitions against anti-profiteering provisions under GST. Besides Subway Systems, Hindustan Unilever, Abbott, Johnson & Johnson, Philips, Acme Developers, Samsonite, Jubilant Foods, Nestle, Whirlpool, Samsung, Subway, Reckitt Benckiser and Patanjali are the petitioners.

The court, which had clubbed the petitions, on Thursday posted the matter for next hearing on November 8.

The petitioners also questioned the validity of anti-profiteering provisions when there is no definition of profiteering, methodology of calculating profiteered amount under the GST regime.

"There is an excessive delegation on various fronts and hence the issue is whether profiteering could be applicable in the absence of methodology and penalty can be levied when the statute got amended only from a specified date," Rastogi said.