2019 (2) TMI 1719 - HC - GST

Denial of Bail Application for GST Fraud Offences Under Section 132(1)(B), (C) & (D)

The bail application under Section 439 CrPC for offences under Section 132(1)(B), (C) & (D) of the CGST Act, 2017 was dismissed by the court. The ... Offence under Section 132(1)(B), (C) & (D) of Central Goods and Services Tax (CGST) Act, 2017 - Service of notice - HELD THAT:- Petitioner was summoned in terms of Section 70 of the Act. Petitioner appeared and was duly interrogated and his statement was recorded and thereafter, he was arrested. Under the Act show cause notice is to be served to the company with regard to the amount due. However, in the present case, no such notice has been issued to the company. The amount required to be paid by the company has not been determined so far. Company has a remedy to file an appeal against the determined amount. Company has already deposited ₹ 4 crores with the concerned authority which would have been required to be paid by the company in case of filing of appeal against the assessment order. In-fact, no further amount is required to be deposited by the company with the concerned authority in the present case. Offence under the Act is compoundable. Petitioner is merely an employee of the company. The offence committed by the accused is serious in nature. In-fact, the accused had issued bogus invoices without actual movement of goods which led to involvement of fraudulent input taxes amounting to ₹ 40.58 crores. Admittedly, company has deposited ₹ 6.95 crores with the concerned authority towards non-payment of G.S.T. Case is still under investigation. Keeping in view the seriousness of the allegations levelled against the petitioner, no ground for grant of bail to him is made out - petition dismissed. Issues:1. Bail application under Section 439 CrPC for offence under Section 132(1)(B), (C) & (D) of CGST Act, 2017.Analysis:The petitioner filed a bail application seeking regular bail in a case for offences under Section 132(1)(B), (C) & (D) of the Central Goods and Services Tax (CGST) Act, 2017. The petitioner has been in custody since 19.01.2019 and is presently in judicial custody. The company associated with the petitioner has already deposited a substantial amount with the concerned authority, including an additional amount of &8377; 4 crores. The petitioner was summoned under Section 70 of the Act, interrogated, and arrested. Notably, no show cause notice has been served to the company regarding the amount due, and the exact amount to be paid has not been determined. The company has the right to appeal against the assessment order, and the amount already deposited covers the potential appeal amount. The petitioner is described as an employee of the company, and the offence under the Act is compoundable.The Union of India, represented by learned counsel, opposed the bail petition, arguing that the offence committed by the petitioner is serious. The accused allegedly issued bogus invoices without actual movement of goods, resulting in fraudulent input taxes totaling &8377; 40.58 crores. Despite the company depositing &8377; 6.95 crores towards non-payment of GST, the case remains under investigation. Considering the gravity of the allegations against the petitioner, the court found no grounds for granting bail. Therefore, the bail application was dismissed by the court.