2021 (7) TMI 1313 - HC - GST

Bail application denied for Rs. 44 Cr fake ITC bill scam under Section 439

The court dismissed the bail application under Section 439 of Cr.P.C. for offenses related to the Central Goods and Services Tax Act, 2017 involving the ... Seeking grant of bail - availment of wrongful ITC - transfer of fake ITC Bills - dispute is from November 2017 to March 2019 - HELD THAT:- From the investigation done by the Department, it is evident that there was no movement of goods done by the petitioner and fake invoices were generated in order to avail the ITC and in order to pass on the ITC to various entities, the fake bills which were generated by the petitioner is to the tune of ₹ 44 Cr. The bail application need not be interfered - bail application dismissed. Issues: Bail application under Section 439 of Cr.P.C. for offences under Sections 132(1(ab))(c) of the Central Goods and Services Tax Act, 2017 involving transfer of fake ITC bills.Analysis:1. The petitioner filed a bail application under Section 439 of Cr.P.C. for offences under Sections 132(1(ab))(c) of the Central Goods and Services Tax Act, 2017 related to the transfer of fake ITC bills amounting to Rs. 7.81 Cr. The petitioner, dealing with scrap, argued that the trial process would be time-consuming as the charge-sheet was filed after arrest, and the period under dispute was from November 2017 to March 2019. The petitioner contended that the statement recorded under Section 70 C.G.S.T. Act should not be held against him. The defense emphasized the legitimate purchase and sale of scrap by the petitioner to other entities.2. The Union of India vehemently opposed the bail application, alleging that the petitioner operated the business from residential premises without actual goods transactions. The prosecution claimed that the petitioner fabricated fake bills amounting to Rs. 44 Cr and created fake firms. It was further argued that the ITC transfer involved 56 suppliers, some of whom confirmed the absence of goods movement. The prosecution asserted that the petitioner's actions were aimed at availing and passing on ITC through the creation of fake invoices.3. The court, after considering the contentions, noted from the Department's investigation that the petitioner did not engage in goods movement but generated fake invoices to fraudulently avail and transfer ITC totaling Rs. 44 Cr. In light of the arguments presented by the Union of India, the court declined to entertain the bail application, ultimately dismissing it. The decision was based on the substantial evidence indicating the petitioner's involvement in the creation and transfer of fake bills for illicit ITC benefits.