Director General of Anti-Profiteering v. ASR Cinema LLP

01 · Facts of the case and issues

The Principal Commissioner, Hyderabad Commissionerate, complained that ASR had not passed on the benefit of the reduction in GST on cinema admission tickets priced at Rs. 100 or less from 18% to 12% with effect from 1 January 2019. The Standing Committee referred the complaint to DGAP; a notice was issued on 23 October 2019. DGAP's report dated 30 April 2024 went to the Competition Commission of India, the then authority. The investigation period was 1 January to 30 September 2019. The source records use of GSTR-1 and GSTR-3B returns because complete information was not furnished; its later procedural discussion also mentions sample invoices.

Table A compares December 2018 with the investigation period. Four displayed ticket rows retained tax-inclusive prices of Rs. 100, Rs. 90, Rs. 70 and Rs. 30. The old base amounts were Rs. 84.75, Rs. 76.27, Rs. 59.32 and Rs. 25.42, while the new base amounts were Rs. 89.29, Rs. 80.36, Rs. 62.50 and Rs. 26.79. The table's commensurate tax-inclusive benchmarks are Rs. 94.92, Rs. 85.42, Rs. 66.44 and Rs. 28.47. It prints percentage increases of 5.36%, 5.36%, 5.36% and 5.39%, averaging to 5.37% after rounding.

Table B applies 5.37% to stated turnover of Rs. 1,60,87,867 and prints base profiteering of Rs. 8,63,919, GST of Rs. 1,03,670 and total profiteering of Rs. 9,67,589. These are DGAP's adopted figures, subject to the arithmetic and method limitations explained below. DGAP's observation that actual profiteering might be higher because information was incomplete did not become an additional quantified award.

ASR did not appear or file submissions despite the notices and opportunities described by the Tribunal. The Tribunal nevertheless examined whether the 8 February 2019 Telangana High Court order in W.P. 2482/2019 concerning proposed ticket fares could justify retaining the tax benefit. The questions also concerned computation, inclusion of GST, ex parte adjudication, interest and penalty. A contemporaneous defended argument by ASR before GSTAT is not asserted: the judgment expressly records its nonappearance.

Source: Complaint, reference and report: paragraphs 4–7.4, physical pp. 3–4. Table A: pp. 4–5; Table B and report qualification: paragraphs 8–9, p. 5. Nonappearance and issues: paragraphs 10–17, pp. 5–9. Sample invoices: paragraph 34, p. 15.

02 · Discussion and reasoning of the Hon’ble Court

The Tribunal treats Section 171(1) as imposing an independent obligation to pass the rate reduction to consumers through commensurate price reduction. It finds that higher base prices preserved the same tax-inclusive ticket prices and absorbed the benefit. It discusses earlier High Court fare-permission orders of 31 October 2016, 28 June 2018 and 8 February 2019. On the quoted terms, the liberty to collect proposed fares was conditional, required communication to the authorities and did not displace Section 171. The Tribunal says compliance with those conditions was not demonstrated and relies on Sudarshan Theatre 35MM for the pass-through obligation. Those earlier rulings are described here as cited by GSTAT; their complete records were not independently reviewed.

The Tribunal accepts inclusion of the GST collected on the excess realisation. It reasons that the consumer paid an amount inclusive of GST and that the corresponding excess tax component is part of the benefit to be returned. It cites paragraph 157 of the Delhi High Court's Reckitt Benckiser judgment. This is the basis for adding Rs. 1,03,670 to the printed Rs. 8,63,919 base amount, rather than an independently verified new tax assessment.

For proceeding ex parte, it invokes Order XVII Rule 2 and Order IX Rule 6 of the Code of Civil Procedure. Its factual basis is repeated service by email, speed post and the jurisdictional Commissionerate, provision of the DGAP report and further opportunities. Paragraph 35 records the Assistant Commissioner's statement on 24 April 2026 that service was complete and a partner's acknowledgment dated 13 February 2026 had been received. It finds adequate opportunity and unrebutted evidence. Nonappearance alone is not described in this note as proof of profiteering independent of that record.

On interest, the Tribunal relies on Rule 133(3)(c), the express interest amendment by Notification 31/2019-Central Tax dated 28 June 2019 and the coordinate-bench Proctor & Gamble ruling. It treats that amendment prospectively and orders 18% interest only from 28 June 2019 until actual refund/deposit. This differs from the initial issue's reference to Rule 133(3)(b). The reasoning and operative clause concern unidentified recipients and Fund deposit under clause (c), and do not abolish recipient-return interest under clause (b).

The operative text expressly applies interest to the total profiteered amount from 28 June 2019 although the investigation extends to 30 September 2019. The source does not provide collection-date tranches or a separate calculation for receipts after 28 June. The wording is preserved, without inventing an adjusted interest schedule or a quantified interest amount.

The penalty analysis is separate. Section 171(3A) took effect on 1 January 2020, after the whole investigated period. Applying the rule against retrospective penal liability, the Tribunal holds that this penalty is not leviable. It is not a general exemption from every penalty provision or a finding that a later deposit met the separate statutory 30-day proviso.

Numerical limitations matter. The four printed percentage increases average 5.3675%, rounded to 5.37%. But Rs. 1,60,87,867 multiplied by 5.37% equals Rs. 8,63,918.4579, rather than the printed Rs. 8,63,919; the source gives no reconciliation. Twelve per cent of the printed base is Rs. 1,03,670.28, consistent with the displayed whole-rupee tax amount after rounding, and the two printed components sum exactly to Rs. 9,67,589. Table B refers to three categories although Table A has four price rows, the fourth combining two classes. No ticket counts, category weights or full transaction annexures are supplied. These are limits on reproducing the adopted method, not an editorial alteration of the award.

Source: Pass-through and fare permissions: paragraphs 18–25, physical pp. 9–13. GST component: paragraphs 26–29, pp. 13–14. Ex parte reasoning: paragraphs 30–36, pp. 14–16. Interest: paragraphs 37–41, pp. 16–17; operative paragraph 46(iii), p. 19. Penalty: paragraphs 42–44, pp. 17–18. Arithmetic: Table A, pp. 4–5, and Table B, p. 5.

03 · Judicial decision and operative relief

The Tribunal determines profiteering at Rs. 9,67,589, comprising Rs. 8,63,919 base profiteering and Rs. 1,03,670 GST. It directs return of that amount and, because recipients are not identifiable, deposit of 50% in the Central Consumer Welfare Fund and 50% in the Telangana State Consumer Welfare Fund. This is Fund relief, not a direct payment award to the Principal Commissioner or named individual consumers.

The respondent must also pay 18% annual interest on the total profiteered amount from 28 June 2019. Paragraphs 40–41 give the endpoint as actual refund/deposit. Principal and interest are to be deposited within 60 days from the date of the order. The jurisdictional CGST/SGST Commissioner is to ensure compliance and submit a report within three months; this separate report direction does not expressly state a receipt-based trigger. Neither deadline is changed here into a different calendar date or a present finding of default.

Penalty under Section 171(3A) is expressly held not leviable for this pre-1 January 2020 period. The order directs copies to the respondent, applicant, DGAP and jurisdictional Commissioners, disposes of the matter and records pronouncement in open court on 27 May 2026. The visible digital-signature display is dated 27 May 2026; no cryptographic signature verification is claimed.

The source does not establish actual payment, allocation rounding, compliance reporting, a later recall or present enforceability. An exact half of the printed principal is Rs. 4,83,794.50; the operative order states percentages and does not specify a whole-rupee split, so no new split is substituted.

Source: No Section 171(3A) penalty: paragraphs 42–44, physical pp. 17–18. Exact determination and operative directions: paragraphs 45–46(i), p. 18, and paragraph 46(ii)–(viii), p. 19. Interest endpoint: paragraphs 40–41, p. 17. Dated signature display: p. 19.

04 · In favour of

Final ex parte adverse principal determination with qualified interest and express temporal penalty relief. The Fund directions and no-penalty conclusion must be reported together. The administrative form’s confirmed-order label is not a separate appellate holding, and the case is not described as a CESTAT dismissal.

Source: Form GST APL-04A, physical pp. 1–2; paragraphs 37–46, pp. 16–19.