LICHFL Care Homes Limited v. Director General Of Anti-Profiteering, Central Board Of Indirect Taxes And Customs & Ors.

What happened

LICHFL Care Homes Ltd. developed the residential project "Jeewan Anand" in Bhubaneswar, begun in 2011 and completed in November 2019, with a total area of about 2,70,048 square feet. On a homebuyer's complaint, the Directorate General of Anti-Profiteering (DGAP) reported on 28 January 2021 that ITC benefits had not been passed on and found profiteering of ₹1,85,70,263 for July 2017 to September 2020, which the National Anti-Profiteering Authority accepted on 20 June 2022. This Court, in Reckitt Benckiser India Pvt. Ltd. v. Union of India (judgment of 29 January 2024), held the ITC-to-turnover methodology flawed for real estate and directed that the total saving for each project be computed and divided by the total area. The petitioner's case was remanded, and the DGAP's fresh report of 4 April 2025 formed the basis for the GSTAT's order of 23 March 2026, which held that the petitioner had profiteered by ₹2,07,08,131 and directed payment of ₹2,31,93,107 to homebuyers with interest at 18%.

Questions before the court

• Did the DGAP's report after remand use a methodology contrary to the directions in Reckitt Benckiser, and did the GSTAT err in upholding it?

Why the court ruled this way

The Court found that the DGAP had not used the earlier ITC-to-turnover method but had determined the additional ITC benefit by reference to the purchase value in the post-GST period, worked out the project-level saving and divided it by the total area to arrive at a per-square-foot benefit. The purchase value was used as the denominator for the proportion of ITC available against project expenditure and not as a proxy for turnover, which makes it materially different from the method rejected in Reckitt Benckiser (paragraph 33). The increase in the rate of tax on services did not show an error in the particular computation, because the DGAP had not treated all post-GST ITC as a windfall (paragraph 43). As for pre-GST CENVAT credit of about ₹2,38,25,609, which the petitioner could have claimed but had not availed, the authorities were justified in examining the credit actually availed in each period rather than a hypothetical credit (paragraph 60). The GSTAT had not acted beyond the remand, and a disagreement with the appreciation of material is no ground for a writ (paragraphs 59 to 62).

Controlling point

Anti-profiteering may be computed project-wide from the additional ITC and passed-on amounts, divided by the total project area, and the mechanism is not invalid merely because it uses the purchase value and a per-square-foot allocation.

Order and next steps

The Court held that the petitioner had not established any ground to interfere with the order of 23 March 2026, and the writ petition and pending applications were dismissed.

Practical implications

A developer facing anti-profiteering proceedings should document the ITC actually availed before and after GST, the purchase values and the project area, since the courts look at actual availment and not credit that could have been claimed. A challenge must show that the method departs from the directions in Reckitt Benckiser.

Limits of this ruling

• The Court dealt with the DGAP's method and the GSTAT's order on this record and did not lay down a formula applicable to every project.