SHARMA TRADING COMPANY v. UNION OF INDIA & ORS.
High Court, Delhi
Prathiba M. Singh, Justice & Shail Jain, Justice
SHARMA TRADING COMPANY
v.
UNION OF INDIA & ORS.
W.P.(C) 13194/2018 dated 23.09.2025
Law : GST
Act Name : Central Goods & Service Tax Act, 2017
Relevant Section : Section 171
Rule Number : Rule 126 & 129
Rule Name : Central Goods & Services Tax Rules, 2017
Notification/Circular : Notification No. 23/2022- Central Tax dated 23.11.2022, Notification No. 18/2024 dated 30.09.2024, Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017, r Notification No. 19/2024– Central Tax dated 30.09.2024
Decision : In favour of assessee
Anti-profiteering – Reduction in GST rate from 28% to 18% – Failure to pass on benefit – Challenge to Section 171 of CGST Act and Rule 126 of CGST Rules – Constitutional validity of Section 171 of CGST Act & Rule 126 of CGST Rules upheld in Reckitt Benckiser India Pvt. Ltd. v. Union of India(2024 Taxo.online 128) – Petitioner increased base price of product after rate reduction while retaining same MRP – Defence of increased quantity/grammage not accepted – Purpose of anti-profiteering to ensure benefit of tax reduction reaches consumer – Sale at same MRP with increased quantity held deceptive – Benefit must be passed by commensurate price reduction, not by volume increase – Penalty proceedings inapplicable as per Reckitt Benckiser – Held: Writ petition disposed – Profiteered amount to be transferred to Consumer Welfare Fund with interest – Penalty proceedings dropped.
Represented By:
Counsel for the Petitioner: Vipul Agrawal, Nodal Counsel
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