GSTAT Confirms Closure Report; DGAP’s Re-Investigation Accepted; No Contravention under Section 171(1) Found

The appeal arose after the National Anti-Profiteering Authority directed further investigation into certain aspects of supply and input tax credit in relation to a residential project. The DGAP conducted an additional inquiry addressing specific points raised by the NAA, including an apparent mismatch in reported EWS unit figures between occupancy certificates and developer submissions, the treatment of turnover for retail units, and the details concerning the reversal of ITC upon receipt of Occupancy Certificates. These matters were recorded in the DGAP’s supplemental report dated 23.05.2025.

On review of the DGAP’s re-investigation report, the Appellate Tribunal concluded that the report deserved acceptance. The Tribunal recorded that the DGAP report addressed the issues as directed by the NAA and that no contravention under Section 171(1) of the CGST Act was established on the material before it. Accordingly, the closure report as prepared by the DGAP was accepted and the order under appeal was confirmed.

Issue Before the Tribunal: The main issue is whether the discrepancies in EWS unit figures, retail turnover treatment, and ITC reversal were sufficiently resolved in the DGAP’s re-investigation, which was directed by NAA, and whether any violation of Section 171(1) of the CGST Act was found.

GSTAT’s Decision: The Appellate Tribunal after looking into the DGAP’s re-investigation report and also taking into account the records of the case, concluded that the investigating authority had indeed followed the directions issued by the NAA and had also properly verified each of the issues that were sent back for further examination. It was noted that the DGAP had re-evaluated the figures related to EWS units, linked them with the occupancy certificates, and given well-reasoned clarifications concerning the treatment of turnover and ITC reversal. The Tribunal did not find any substantial error or omission in the methodology used by the DGAP or in the conclusions made in the report. The Tribunal pointed out that the findings made by the DGAP were in total compliance with the Authority’s earlier directions and moreover, no evidence of profiteering or undue benefit to the developer had been presented on record.

Therefore, the Tribunal acknowledged the DGAP’s closure report of May 23, 2025, and argued that the evidence on record did not prove the violation of Section 171(1) of the CGST Act. Thus, the closure report was ratified and the impugned order was upheld. The Tribunal noted that DGAP had met its obligation and the appellant could not point out any mistake in the investigative findings. The proceedings were accordingly closed, and the final order was signed and pronounced on 17 October 2025 by the Judicial Member.

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