2019 (12) TMI 417 - HC - GST

Accused denied bail in &8377;40.53 crores GST fraud case.

Bharat Raj Punj Versus Central Goods And Service Tax Commissionerate, Alwar Its Inspector (Anti Evasion)

The court denied bail to the accused-petitioner in a case involving alleged wrongful availment of GST Input Tax Credit exceeding &8377;40.53 crores ... Grant of Bail - availment of input tax credit - offences u/s 132 (1)(b)(c) & (d) of the Central Goods Services Tax Act, 2017 - allegations made against the accused petitioner goes to show that bailable offence is made out as provided under Section 132(4) read with Section 132(5) of the Act - HELD THAT:- Looking at the gravity of the offence specially the fact that there are serious allegations against the petitioner of wrong availment of input tax credit of more than ₹ 40.53 Crores involved on supply of goods, the matter is still at the stage of investigation and having regard to the seriousness of the offence and without expressing any opinion on the merits of the case, benefit of bail to the accused-petitioner cannot be granted. Bail application dismissed. Issues involved:Bail application under section 439 Cr.P.C. for offences under Sections 132 (1)(b)(c) & (d) of the Central Goods Services Tax Act, 2017.Analysis:The accused petitioner filed a bail application under section 439 Cr.P.C. in response to a complaint case registered at Central Goods and Services Tax Commissionerate for offences under Sections 132 (1)(b)(c) & (d) of the Act of 2017. The petitioner's counsel argued that the accused was falsely implicated as no offence was made out under the specified sections. It was contended that the Department invoked Section 132 without first determining tax liability or issuing a show cause notice. The counsel highlighted that the arrest memo indicated a bailable offence, emphasizing the lack of evidence connecting the accused to the alleged offence. Additionally, it was argued that the petitioner was not involved in the company's day-to-day affairs during the period under investigation, and the company had already rectified the alleged demand by issuing Credit Notes and making additional payments without any demand from the department. The petitioner's counsel stressed the lack of criminal antecedents and the extended custody period, urging the court to grant bail.On the contrary, the respondent-Department opposed the bail application, alleging that the petitioner's company wrongfully availed GST Input Tax Credit of over &8377;40.53 crores based on invoices from a bogus company without receiving any goods. The Department claimed that the petitioner's involvement as Deputy Managing Director made him complicit in the company's activities, emphasizing the seriousness of the allegations which could impact the country's economy. The respondent highlighted that the investigation was ongoing, and the bail applications of co-accused were previously denied, arguing against leniency in such matters.After considering the submissions and evidence, the court found the allegations of wrong availment of input tax credit exceeding &8377;40.53 crores to be grave, especially at the investigation stage. Without expressing any opinion on the case's merits, the court declined to grant bail to the accused-petitioner, citing the seriousness of the offence and potential impact on the economy. Consequently, the bail application under Section 439 Cr.P.C. was dismissed.