Director General of Anti-Profiteering v. Devi 70MM

01 · Facts of the case and issues

The Principal Commissioner, Central Tax and Central Excise, Hyderabad, filed the original complaint on 28 June 2019 alleging that Devi 70MM did not pass on the cinema-admission GST reduction from 18% to 12% effective 1 January 2019. The formal case title names DGAP as appellant. December 2018 ticket prices were Rs. 118 for Upper and Lower Balcony, Rs. 80 for First Class and Rs. 50 for Second Class. Table B shows the balcony base price remaining Rs. 100 and its gross price falling to Rs. 112; the disputed First and Second Class gross prices remained Rs. 80 and Rs. 50 while their base prices increased. No balcony profiteering was computed.

The original DGAP report dated 27 December 2019 examined 1 January–30 June 2019 and proposed Rs. 1,29,242.85, comprising Rs. 39,066.46 for First Class and Rs. 90,176.39 for Second Class. The NAA internal order dated 7 October 2020, as reproduced, found commensurate reduction from 11 March 2019 and confined reinvestigation to 10 March. It treated the later May price increase as unconnected to Section 171 in this case and acknowledged that the authority was not a price regulator. The revised DGAP report dated 26 November 2020 computed Rs. 81,722 for 1 January–10 March 2019.

Devi argued that it had charged the correct reduced tax, that cinema admission was a service involving no stock of goods or retained ITC benefit, and that different films and commercial conditions justified varying fares within the State-permitted range. It supplied film names and exhibition dates. DGAP answered that documentary evidence did not establish the claimed governmental or producer/distributor control over the actual prices. The issues were whether those defences displaced the duty to pass on the rate reduction and whether the revised computation was established.

Source: Original sequence: complaint, rates and tickets, paragraphs 1–6, physical pp. 2–3; first investigation and NAA direction, paragraphs 7–10, pp. 4–5; revised report and Tables B/C, paragraphs 12–16, pp. 5–6; respondent submissions, paragraph 19, pp. 7–8. Restarted sequence: DGAP clarification, paragraph 11, p. 8; oral submissions, paragraphs 13–18, p. 9.

02 · Discussion and reasoning of the Hon’ble Court

The Tribunal made its own findings on the rate-reduction obligation, service argument and evidence. It found no cogent proof that Devi had reduced the First and Second Class fares from 1 January 2019 or had otherwise passed the tax benefit to viewers. Correctly accounting for tax at the reduced rate was not accepted as proving a commensurate reduction in the price paid by the consumer. The absence of stock or an accumulated ITC benefit did not answer the rate-reduction issue: the registered theatre supplied services and filed GST returns. Although the reasons also use ITC language, no separate ITC benefit is quantified in this decision.

For First Class, Table B displays a base increase from Rs. 67.80 to Rs. 71.43, or Rs. 3.63 per ticket. Table C adds Rs. 0.44 tax, producing Rs. 4.07 per ticket for 6,254 tickets and Rs. 25,453.78. For Second Class, the displayed base rises from Rs. 42.37 to Rs. 44.64, an increase of Rs. 2.27; Rs. 0.27 tax produces Rs. 2.54 per ticket for 22,153 tickets and Rs. 56,268.62. The 28,407 tickets and displayed class totals yield Rs. 81,722.40, while the table total, narrative and order state Rs. 81,722. These are the source's rounded per-ticket figures, not a new computation from the underlying sales records. Paragraph 13 on physical page 6 first prints Rs. 24,453.78 for First Class, then Rs. 25,453.78; Table C uses the latter. The discrepancy is retained.

The Tribunal rejected the unsupported reliance on movie-specific demand, age, performance, weekends and holidays, invoking the passages from Reckitt Benckiser on the pass-through inquiry. Its conclusion must be read with paragraph 30, which expressly preserves lawful, fair and transparent price-setting freedom but denies using that freedom to defeat the statutory benefit. The NAA's earlier limitation of the investigation also prevents treating this judgment as an indefinite price freeze. GSTAT relied on the Sudarshan Theatre passage reproduced in paragraph 21 and treated the DGAP methodology and calculations as unchallenged in paragraph 28. It supported the latter inference with Thangam's specific-denial principles under Order VIII Rules 3 and 5 CPC; that Supreme Court civil case is not itself a decision on this GST liability.

Several source tensions remain material. Paragraphs 6 and 8 call Rs. 75 and Rs. 45 the later reduced base prices for 11 March–8 May 2019, and oral-submission paragraph 13 repeats the 8 May endpoint; finding paragraph 24 instead states 11 March–30 June 2019. This note does not harmonise those descriptions. Original-sequence paragraph 18 names a report dated 27 November 2020, whereas paragraphs 12 and 34–35 identify 26 November 2020; finding paragraph 28 refers back to the original 27 December 2019 report despite discussing the shorter period. Finally, paragraph 31 prints Section 170(1) for a rebuttable presumption. Section 170 actually concerns rounding off and has no subsection (1). The presumption remains the Tribunal's evidential reasoning; the finding of contravention is under Section 171.

Source: Tables B and C and inconsistent First Class recital: original-sequence paragraphs 12–14, physical pp. 5–6. Later-price recitals: original paragraphs 6 and 8, pp. 3–4; restarted oral paragraph 13, p. 9; finding paragraph 24, pp. 13–14. Cited authorities: finding paragraphs 21–22, pp. 11–13, paragraph 25, p. 14, and paragraph 29, pp. 15–16. Tribunal's own evidence/service/pricing findings: paragraphs 23–32, pp. 13–17. Report dates: original paragraph 18, p. 7; findings paragraphs 28 and 34–35, pp. 15 and 17. Erroneous provision: paragraph 31, p. 17.

03 · Judicial decision and operative relief

GSTAT found a contravention of Section 171, rejected Devi's objections and accepted the DGAP report dated 26 November 2020. Paragraph 37 directs deposit of Rs. 81,722, inclusive of the applicable GST component, with interest at 18% from 1 January 2019 to 10 March 2019, as applicable. It allocates 50% of the profiteered amount together with interest to the Central Consumer Welfare Fund and the remaining 50% together with interest to the Telangana State Consumer Welfare Fund. The earlier recital records that the individual consumers were not identifiable and that all ticket sales occurred in Telangana.

The exact operative interest dates are retained. The order does not say that interest runs until payment, nor does it substitute a 28 June 2019 commencement. No numerical deposit deadline is stated in the operative directions. The thirty-day wording in the reproduced Section 171(3A) proviso is not converted into a deadline or a condition attached to this order's relief.

Paragraph 37 expressly provides that no penalty shall be leviable. This judgment supplies no separate commencement-based explanation for that ruling; a rationale from another cinema case is not imported. The Tribunal directs communication to the relevant CGST/SGST Commissionerate, pronouncement in open court and upload to the official portal. The source establishes directions to deposit, not completed payment or compliance.

Source: Unidentifiable recipients and State scope: original-sequence paragraph 15, physical p. 6. Statutory quotation: restarted finding paragraph 19, pp. 10–11. Liability and report acceptance: paragraphs 31–36, p. 17. Amount, exact interest period, equal fund allocation and no penalty: paragraph 37, p. 17. Communication, pronouncement and upload: paragraphs 38–40, pp. 17–18.

04 · In favour of

A final substantive determination of Section 171 liability for Rs. 81,722 inclusive of GST, with the expressly stated 18% interest and equal Consumer Welfare Fund allocation. The Tribunal resolved the contested service, pricing and evidential defences rather than merely recording administrative acceptance or closure after compliance. No penalty was imposed. Later appellate treatment and actual deposits are not established by this source.

Source: Independent Tribunal reasoning: findings paragraphs 23–32, physical pp. 13–17. Final directions: paragraphs 35–40, pp. 17–18.