Case Details: DGAP vs. Mallikarjuna Cinema Hall, 70MM Hyderabad - [2025] 178 taxmann.com 393 (GSTAT - NEW DELHI)
Judiciary and Counsel Details
- Dr. Sanjaya Kumar Mishra, President
- Swapnil Srivastave for the Respondent
Facts of the Case
The assessee, a cinema hall owner, was found by the Director General of Anti-Profiteering (DGAP) to have not reduced ticket prices commensurately following successive reductions in GST rates, despite GST being lowered from 28% to 18% and then from 18% to 12%. The assessee contended that the orders of the High Court of Telangana and subsequent Government notifications fixing maximum ticket prices, while allowing theatre owners discretion to set prices, absolved it from any liability for profiteering. The assessee argued that this discretion permitted it to maintain ticket prices at pre-GST-reduction levels. The matter was accordingly placed before the GST Appellate Tribunal (GSTAT).
GSTAT Held
The GSTAT held that the cinema hall had indeed profiteered by not passing on the benefit of reduced GST rates to consumers. The Tribunal observed that the Cinemas Act, relevant Government orders, and the High Court judgment only prescribed maximum prices and did not restrict the assessee’s discretion to reduce prices; therefore, the failure to reduce ticket prices amounted to profiteering. The Tribunal directed the assessee to deposit the amount profiteered along with interest at the rate of 18% for the specific days identified, noting that the provision for imposition of interest was prospective and applicable only to those days. Consequently, the DGAP report was upheld, confirming that the assessee had profiteered under Section 171 of the CGST Act and Delhi GST Act, and was required to deposit the profiteered amount with interest.
List of Cases Referred To
- Mallikarjuna Traders v. Union of India [Writ Petition No. 3087 of 2020, dated 3-6-2021] (para 6)
- Ramakrishna Glitterati v. State of Telangana [Writ Petition No. 19046 of 2014, dated 31-10-2016] (para 9)
- Reckitt Benckiser India (P.) Ltd. v. Union of India [2024] 158 taxmann.com 675/102 GST 495/82 GSTL 344 (Delhi) (para 17)
- CIT (Central)-I, New Delhi v. Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249/271 CTR 1/367 ITR 466/227 Taxman 121 (SC) (para 19)
- Awadh Kishore Das v. Ram Gopal AIR 1979 SC 861 (para 27)
- Nagubai Ammla v. B. Shyama Rao AIR 1956 SC 953 (para 27)
- Nagin Das, Ram Das v. Dalpat Ram, Ichcha Ram allies Brij Ram AIR 1974 SC 471 (para 27)
- Monnet Ispat & Energy Ltd. v. Union of India (2012) 11 SCC 1 (para 30)
- DGAP v. Procter & Gamble Group [NAPA/13/PB/2025, dated 10-9-2025] (para 31).
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