Delhi High Court stays NAPA order requiring Johnson & Johnson to deposit ‘profiteered’ funds

By

Isabelle Crossley

Published
Mar 6, 2020

The Delhi High Court ruled to stay the National Anti-Profiteering Authority’s prior decision directing personal care brand Johnson & Johnson to pay Rs 230 crore ($31.14 million) as a penalty for alleged profiteering.

 
On March 4, the Delhi High Court ruled that the NAPA cannot go ahead with its ruling to order Johnson & Johnson to pay a fine for what NAPA ruled was goods and service tax profiteering, the Press Trust of India reported. The court’s justices Vipin Sanghi and Sanjeev Narula also prevented the NAPA from initiating any penalty proceedings against Johnson & Johnson.
 
The court described the NAPA’s methodology for deciding what constitutes profiteering was “flawed."

The NAPA had ruled last year that Johnson & Johnson was guilty of GST profiteering on over 306 of its products, as it alleged the business had not sufficiently passed on GST rate cut benefits to the consumer. 
 
The NAPA had instructed Johnson & Johnson to deposit the Rs 230 crore in a consumer welfare fund. Johnson & Johnson contested the ruling, made on December 23, 2019, which led to the hearing at the Delhi High Court. 
 
The court’s ruling means that the NAPA cannot penalise Johnson & Johnson. The case will be heard again on September 24, 2020. Johnson & Johnson denies all allegations of profiteering.