New Delhi: The Delhi High Court has put on hold a Goods and Services Tax Appellate Tribunal (GSTAT) directive that required direct-to-home operator Tata Play to deposit ₹450 crore into consumer welfare funds over alleged profiteering.
The tribunal had concluded that Tata Play failed to pass on the benefits of reduced tax incidence following the rollout of the Goods and Services Tax (GST), while continuing to charge subscribers similar prices before and after the tax regime change. The order stemmed from a complaint filed by Sweety Agarwal, which alleged that consumers were denied the benefit of lower effective taxes and additional input tax credits.
Following an investigation, the Director General of Anti-Profiteering (DGAP) held that several pre-GST levies—including service tax, VAT and entertainment tax—were subsumed under GST, resulting in a reduced effective tax burden. However, according to the DGAP, Tata Play did not adjust its pricing proportionately, leading to the ₹450 crore profiteering assessment.
Tata Play challenged the findings before the High Court, arguing that the premise of profiteering was flawed. Senior counsel Arvind P. Datar, appearing for the company along with Anuradha Dutt, submitted that entertainment tax had never been passed on to customers even in the pre-GST regime, making the allegation of undue gain untenable. The company also contended that it was being unfairly singled out compared to other industry players.
The defence further relied on an earlier High Court order from September last year, which had remanded the matter to the GSTAT for a limited review. That order had directed the tribunal to examine whether profiteering had indeed occurred and whether the DGAP’s ₹450 crore computation was based on concrete evidence or mere conjecture—particularly in light of the GST rate on DTH services rising to 18% from the earlier 15% service tax.
Datar also argued that the tribunal had exceeded the scope of this remand by effectively revisiting issues beyond the court’s directions. He pointed to a November 2022 order in which interim relief had been granted to Tata Play during earlier proceedings.
Taking note of these submissions, a bench comprising justices Nitin Wasudeo Sambre and Ajay Digpaul directed that no coercive action be taken against Tata Play until further orders. The court observed that the matter warranted continuation on similar interim terms as earlier proceedings and has scheduled the next hearing for July 28.
Legal experts suggest the case could have wider implications for anti-profiteering jurisprudence under GST. Ikesh Nagpal, Lead – Indirect Tax at AKM Global, said the court’s approach signals a stricter insistence on evidentiary backing in such cases. He noted that the earlier remand order had already underscored the need to distinguish between genuine tax benefit retention and assumptions based on incomplete analysis.
Nagpal added that the interim stay indicates judicial caution against expanding the scope of remand proceedings beyond their original mandate. “It reinforces that a remand is meant for structured re-evaluation, not a second attempt to validate earlier conclusions,” he said, adding that the final ruling will be closely watched by the industry.
