Delhi HC put stay on Patanjali Ayurveda

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The Delhi High Court put stay on the penalty proceedings initiated against Patanjali Ayurved for allegedly profiteering ₹75 crore through sale of its products. The stay was subjected to the condition that it deposits the amount in question in the consumer welfare fund in six monthly installments.

The high court issued notice to the Centre, that is, National Anti-Profiteering Authority (NAA) and the Director-General of Anti Profiteering (DGAP) seeking their stand on the company’s plea which has claimed that NAA “failed to appreciate” that Patanjali has passed on benefits worth over ₹151 crore to the consumers.

The petitioner company contended that in the absence of a methodology the entire proceeding before the National Anti Profiteering Authority (NAA) is in breach of natural justice and violative of Articles 14 and 19(1)(g) of the Constitution. It was pointed out that in thirty-five similar matters this Court has issued notice and listed the matters for hearing on 24th August 2020.

According to Patanjali, it passed on the benefit in tax reduction to consumers by various means, including cashback schemes, discounts through secondary and retailer schemes, and not increasing the selling price of certain items even after an increase in the tax rate.  However, without appreciating these claims, NAA held that it has profiteered an amount of ₹75,08,64,019 and had directed that it be deposited in the consumer welfare fund.

A bench of justice issued the direction on Patanjali’s plea challenging the 12th March 2020 order of the National Anti-profiteering Authority (NAA) holding that the company denied to its customers the benefits of reduction in Goods and Services Tax (GST) between November 2017 to March 2019.

The interest amount as well as the penalty proceedings initiated by the respondent authority stay till further orders.

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