2020 (12) TMI 1270 - DSC - GST

Dismissed: Couple's Bail Pleas Rejected in GST Fraud Case

The court dismissed the anticipatory bail applications of a husband and wife who sought relief under sections 132(5) and 137 of the Central Goods and ... Seeking grant of pre-arrest bail - fake/bogus Tax invoices without supply/movements of goods - offence 132(5) read with 137 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Upon perusal of the reply filed by the prosecution and the documents placed on record, it would reveal that prima facie there is force in the allegations made against the applicants. The statement of co-accused Mahesh Kinger speaks volume. Considering these allegations, it can be said that unless the investigation officer gets an opportunity to unearth the facts, he will not be in a position to reach to the proper conclusion. Involvement of applicant No.2 in the present crime - HELD THAT:- Upon perusal of the statement of applicant No.2 it would reveal that she has signed the balance sheet of the company, invoices, RTGS documents, and Cheques. This goes to suggest prima facie involvement of applicant No.2 in the business of the Company. Thus, I do not find merit in the submission of the learned advocate for the applicants. There are no merit in the contention raised in the application that the applicants have been falsely implicated and that there is no need of custodial interrogation. On the contrary, considering the facts and circumstances of the case and the fact that there are allegations of evasion of huge taxes, if an anticipatory bail is granted to the applicants, that would certainly adversely affect the investigation. Bail application dismissed. Issues:Apprehension of arrest under sections 132(5) and 137 of the Central Goods and Services Tax Act, 2017; Relief of pre-arrest bail sought by husband and wife; Allegations of issuance of fake/bogus tax invoices without supply of goods; Involvement of multiple companies forming a cartel; Prima facie evidence against the applicants; Lack of cooperation with the investigation; Involvement of applicant No.2 in the business of the company; Dismissal of anticipatory bail applications.Analysis:The applicants, a husband and wife, sought pre-arrest bail due to the fear of arrest for offenses under sections 132(5) and 137 of the Central Goods and Services Tax Act, 2017. The husband was the applicant in one case, while the wife was the applicant in the other. The applicants claimed they were falsely implicated and not involved in the business activities leading to the alleged offenses. The prosecution argued that there was substantial evidence showing the applicants' involvement in issuing fake tax invoices without actual goods transactions, forming a cartel with multiple companies. The prosecution highlighted the seriousness of the allegations and the impact on the public exchequer due to tax evasion.The court noted that the applicants were directors of a company involved in the alleged offenses. The prosecution presented evidence indicating a significant amount of ineligible Input Tax Credit availed and passed on by the company. The court found prima facie merit in the allegations based on the prosecution's reply and supporting documents, emphasizing the need for further investigation to establish the truth. The court highlighted the statement of a co-accused as significant in this regard.Regarding the involvement of applicant No.2, the wife, the defense argued she had no role in the criminal activities as she was a housewife. However, the prosecution presented evidence suggesting her active participation in the company's operations by signing various documents related to financial transactions. The court found prima facie evidence of her involvement based on the documents and statements provided.The court observed that the applicants did not fully cooperate with the investigation. While applicant No.2 attended some sessions with the investigation officer, her responses indicated a lack of cooperation and attempts to evade providing crucial information. The court concluded that custodial interrogation was necessary due to the seriousness of the allegations and the potential impact on tax evasion. As a result, the court rejected the anticipatory bail applications, stating that granting bail could impede the ongoing investigation. The court emphasized the need for custodial interrogation to uncover the truth in the case, leading to the dismissal of the bail applications.