Director General of Anti-Profiteering v. Vertex Homes Pvt. Ltd.

01 · Facts of the case and issues

Abhilash Mohanty alleged that Vertex Homes Pvt. Ltd. had not passed the additional GST ITC benefit to him in the Vertex Panache project at Kokapet, Hyderabad. The Standing Committee referred the complaint to DGAP. Its original report dated 27 August 2025 proposed Rs. 73,00,010 for 140 eligible homebuyers, comprising Rs. 65,17,866 base amount and Rs. 7,82,144 GST at 12%. This proposal is historical and is not the amount ordered by the Tribunal.

In submissions filed on 29 June 2026 and refiled on 13 July 2026, the developer contrasted a budgeted construction cost of Rs. 1,56,94,91,872 with actual expenditure of Rs. 1,61,06,72,320. The total overrun was Rs. 4,11,80,448, including indirect costs. Its narrower claim for escalation in ready-mix concrete, sand and bricks was Rs. 3,49,87,499, based on asserted increases of 19.87%, 62.98% and 73.17% respectively. A 25 June 2026 certificate of Tukaram & Co. LLP referred to books, cost and purchase records and Annexure I.

The developer also submitted that the original report excluded 197 flats whose agreed consideration already included anticipated GST ITC. That recital is a party submission about the report, not a separately reasoned universal rule that a contractual ITC clause always establishes pass-through. The judgment does not supply a complete project buyer list or a precise investigation end date. The applicant did not appear or respond to the clarification despite opportunities; the Tribunal considered the record and submissions rather than treating absence as proof of the merits.

Source: Complaint and original report: paragraphs 1–5, physical pp. 2–3. Cost claims and certificate: paragraphs 6.1–6.6, pp. 3–6. Excluded-flat submission: paragraph 6.7, p. 6. Hearing history and applicant absence: paragraphs 8–10, p. 8.

02 · Discussion and reasoning of the Hon’ble Court

DGAP’s clarification dated 30 July 2026 accepted Rs. 3,49,87,499 cost escalation after examining the CA certificate and sample invoices. Revised Table B states pre/post credit-to-purchase ratios of 13.60% and 18.98%, a 5.38-percentage-point increment, post-GST goods/services purchases excluding taxes and duties of Rs. 45,91,09,633, and additional ITC savings of Rs. 2,47,02,175. Deducting the accepted escalation produces negative savings of Rs. 1,02,85,324 and nil profiteering. The developer accepted the revised findings by letter dated 19 August 2026.

Although paragraph 11 initially says no further issues remain, paragraphs 11.1–11.8 independently examine why the revised conclusion is justified. The Tribunal evaluates the budget/actual breakdown, the material-specific claim, the independent certificate and DGAP’s invoice verification. It finds the escalation genuine and substantial, and holds that deducting the proven escalation from additional ITC savings is appropriate on this record.

The Tribunal applies Reckitt Benckiser paragraphs 118 and 163: genuine commercial factors can justify price changes, and an anti-profiteering order can be erroneous if it ignores relevant cost variations. The judgment does not turn every budget overrun into a deduction, accept the entire Rs. 4,11,80,448 overrun, or decide that a certificate alone is conclusive. Its acceptance concerns the narrower verified material-cost figure of Rs. 3,49,87,499. The High Court principles and this Tribunal’s particular computational application remain distinct.

A numerical limit should be preserved. Multiplying the displayed 5.38% by Rs. 45,91,09,633 gives approximately Rs. 2,47,00,098.26, rather than the printed Rs. 2,47,02,175. The underlying unrounded ratio is not supplied in this PDF, so the difference cannot be conclusively attributed to rounding or silently repaired. The subtraction using the source’s printed savings and escalation does give the stated negative Rs. 1,02,85,324. Neither this negative result nor the old gross demand is a refund award in the developer’s favour.

Source: DGAP clarification and revised Table B: paragraphs 7.1–7.3, physical pp. 6–7. Acceptance letter: paragraph 8, p. 8. Tribunal’s own evidence and methodology findings: paragraphs 11–11.8, pp. 8–12. Reckitt references: paragraphs 6.5, 11.5 and 11.6, pp. 5 and 10–11. Negative conclusion: paragraphs 12–13, p. 12.

03 · Judicial decision and operative relief

The Tribunal accepted the DGAP report dated 27 August 2025 read with its clarification dated 30 July 2026 and held that Vertex Homes had not contravened Section 171 for Vertex Panache. It found that the established construction-material cost escalation entirely offset the additional ITC benefit on the accepted project calculation.

The original Rs. 73,00,010 proposal was therefore not confirmed as an enforceable liability. No refund to the developer, homebuyer payment, Consumer Welfare Fund deposit, interest or penalty is ordered, and no payment or compliance-report deadline is imposed. Registry was directed to send copies to the applicant, respondent and jurisdictional CGST/SGST Commissioner. The proceeding was disposed of and the judgment pronounced on 2 September 2026.

The final result rests on the substantive findings in paragraphs 11.1–13, alongside the accepted revised evidence. It is not presented as a settlement or a finding that a previous liability had already been paid. The administrative labels Confirmed and Closure Report do not convert the superseded investigation proposal into an operative demand.

Source: Substantive no-profiteering conclusion and report acceptance: paragraphs 11.7–14, physical pp. 11–12. Communication, disposal and pronouncement: paragraphs 15–17, p. 13. Administrative summary: p. 2.

04 · In favour of

Final reasoned no-contravention adjudication. The Tribunal independently evaluates the supporting evidence and legal relevance of genuine cost escalation and applies those findings to the revised negative savings calculation. Applicant nonappearance and the developer’s acceptance of the revision are context, not substitutes for that reasoning.

Source: Paragraphs 10–14, physical pp. 8–12; final directions paragraphs 15–17, p. 13.