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L’oreal India Private Limited deposits 80 crores before Supreme Court challenging Delhi High Court decision

The Supreme of India has seen Rs 80 crore deposit from L’oreal India Private Limited in the matter challenging the Delhi High court order, whereby the court directed Loreal to deposit the principal profiteered amount after deducting the GST imposed on the net profiteered amount in six equal installments.
The Bench of Justice Sanjiv Khanna and  Justice M.M. Sundresh shall be hearing the matter in the month of September 2023, before which the parties are directed to file their reply.

The Apex Court had earlier put a stay on the Delhi High Court order directing Loreal to deposit Rs 80 crore within 60 days.

As per the order, there was an increase in customs duty to the extent of Rs 16.26 crore and an increase in additional grammage to the extent of Rs 22.85 crore.

The matter is still lying pending before the Bench of Justice Manmohan and Justice Dinesh Kumar Sharma in Delhi High Court and listed next on May 1, 2023.

The petition contended that the National Anti-Profiteering Authority (NAA) has no suo motu powers and therefore, the application filed by the Secretary, NAA, to the Standing Committee seeking initiation of proceedings under Section 171, was not a valid initiation of proceedings against the petitioner for examining whether there was any profiteering or not.

It was also said the post sale discount of Rs 73.59 crore was given by L’Oréal, so ideally this amount should be reduced from the total profiteered sum.

“Section 171 of the CGST Act, 2017 casts an obligation of every supplier of goods and services/registered person to pass on the benefit of rate reduction of GST or the benefit of ITC on every supply and not on some supplies,” it added.

The Court said that a supplier cannot claim that he has passed on more benefit to one customer so he could pass less or no benefit to another customer than the benefit which is actually due to that customer.

When a statute clearly provided for a manner in which something had to be done, it became the duty of the supplier to extend the benefit of rate reduction by way of commensurate reduction in prices, the supplier cannot insist that instead of reducing prices, he will give extra grammage of the product, noted the Court.

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