NEW DELHI: The Delhi High Court’s decision to uphold the constitutional validity of anti-profiteering provisions has left industries grappling with implications of the ruling.
Experts say most of the companies across sectors are expected to challenge the HC’s ruling in the Supreme Court as it would have a potential impact on their operations.
In view of this ruling, the industry is faced with the task of reevaluating their pricing strategies and business practices. The judgement poses other challenges for the industry.
“The judgment doesn’t clearly bring out how to address the different basis of calculations for similar industries in the orders of National Anti-profiteering Authority/Directorate General of Anti-profiteering. The taxpayers would hope for more clarity on these aspects and on a way forward on the directions to be passed on February 8, 2024,” BDO India said.
It says while the HC order has accepted the principle of net increase in price due to commercial and economic factors, which was till now a major area of concern for taxpayers, the mandatory directions of passing on amount of benefit only by way of reduction and not by any other method like rise in grammage etc is in contradiction to the position taken by the industry.
V Lakshmikumaran, founder and managing partner at Lakshmikumaran & Sridharan Attorneys, is satisfied that the court recognised the absurdities in NAA orders and requiring fresh reconsideration is a welcome relief.
“This judgment requires careful consideration by the Apex court in terms of earlier jurisprudence. The CCI needs to consider the principles laid by the court in deciding pending matters" he added.
Pratik Jain, Partner with PwC India also echoed the same, “So, the High Court upheld the constitutionality of anti-profiteering provisions but also noted potential errors in calculating alleged profiteered amounts, especially in the real estate sector. Consequently, the deposited amount's quantum is expected to be disputed in many cases.”