The Delhi High Court on Tuesday stayed the National Anti-Profiteering Authority (NAPA) order initiating penalty proceedings against Johnson & Johnson Private Ltd.
The court issued notice to the central government, National Anti-Profiteering Authority, CGST Authorities on Johnson & Johnson's petition.
A Division Bench of Justices Vipin Sanghi and Sanjeev Narula asked Centre and others to file a response on the plea and listed the matter for further hearing on September 29.
The court was hearing a petition filed by Johnson & Johnson challenging the order dated November 21, 2019 passed by National Anti-Profiteering Authority (NAA) wherein it is held that the petitioner company did not pass on the commensurate benefit of reduction in the rate of tax to its recipients, during the period between July 27, 2018 to September 30, 2018 and hence profiteered an amount of Rs. 42,70,18,581 in contravention to Section 171(1) of the Central Goods and Services Tax Act, 2017.
The NAA, in its order, has directed to deposit the amount of Rs. 42,70,18,581 under Rule133(3)(c) of the Central Goods and Services Tax Rules, 2017 to the Central consumer welfare fund and to the respective State consumer welfare fund.
In terms of Rule 133(3)(a) of the CGST Rules, petitioner has been directed to reduce its price by way of commensurate reduction keeping in view the reduced rate of tax.
The petitioner company has also challenged a show-cause notice issued against it for explaining why the penalty prescribed under Section 171(3A) of the CGST Act read with Rule 133(3 )(d) of the CGST Rules, should not be imposed on it.
"The constitutional validity of Section 171 of the COST Act and Rules 126, 127 and 133 of the COST Rules as being ultra vires Articles 14, 19(1)(g), 265 & 300A of the Constitution of India," the plea read.
The present proceedings initiated against the company were in relation to the stary protection products. Each of the distinct items supplied under the category of stary protection products are identified with the help of a product code, referred to as Stock Keeping Units.
The Petitioner supplies SKUs in question across markets through various distribution channels and pricing of the same varies depending on the commercial terms with each recipient, the company told the court.
( With inputs from ANI )