2023 (2) TMI 275 - DSC - GST

Accused Denied Pre-Arrest Bail in Major GST Fraud Case Involving Rs.10.11 Crores Due to Non-Cooperation

HC denied anticipatory bail to accused in GST fraud case involving Rs.10.11 crores. Prosecution established non-cooperation by accused, who failed to ... Seeking grant of Anticipatory Bail - fraudulent availment of IGST refund by exporters and passing fraudulent input tax credit (ITC) by their suppliers - HELD THAT:- At the outset it is required to be noted that the documents as relied upon by the ld. Counsel for the accused/applicant i.e. panchnama dated 11.09.2019, perusal of the same would clearly show that such proceedings were initiated by DGGI Head Quarter and it is mentioned in that panchnama that those proceedings were with regard to GST evasion initiated by Head Quarter of DGGI whereas the proceedings in question are initiated by DGGI DZU. As such document heavily relied upon by ld. Counsel for the accused/applicant is not only irrelevant to the proceedings rather a faint attempt to misguide the court. As per the allegations, accused/applicant being partner/proprietor of the firms has not only furnished ITC of GST in respect of his three firms to the total sum of Rs.10.11 crores but has also not joined the investigation and has never furnished any document of carrying on any business with AIPL. The ratio laid down in the judgment of Tarun Jain’s case [[2021 (12) TMI 135 - DELHI HIGH COURT]] are distinguishable to the facts of the present case. No doubt in para 44 of the said judgment it was noted that even in economic offences case if the scheme of CGST is such that most of the offences have been made compoundable, court should be liberal in granting of anticipatory bail. However at the same time it is also to be seen that whether accused seeking judicial indulgence has been cooperative in the investigation or not - In the present case it is found that applicant has not cooperated as mentioned in the reply dated 30.01.2023 of DGGI DZU that despite issuance of four summons accused/applicant has not turned up and has never furnished documents also in support thereof. First of all there is no document annexed with the bail application to substantiate the facts and that has also been disputed by the Department. As such above said fact also does not come to any help to the accused/applicant - bail application dismissed. Issues:1. Anticipatory bail application of accused Manoj Goyal regarding fraudulent activities related to GST refunds and input tax credit.2. Allegations of fraudulent IGST refund claims by accused/applicant's firms.3. Defense arguments based on business activities and medical grounds.4. Dispute over the relevance of submitted documents and lack of cooperation in the investigation.5. Disputed claims of payments made by accused/applicant's firms to show bona fide intentions.Detailed Analysis:1. The judgment addressed an anticipatory bail application by accused Manoj Goyal, associated with firms involved in alleged fraudulent activities related to GST refunds and input tax credit. The prosecution case highlighted fraudulent claims made by a company, revealing the involvement of Goyal's firms in availing inadmissible refunds. The accused failed to appear before authorities despite summons, leading to suspicions of his involvement in the fraudulent activities amounting to Rs.10.11 crores.2. The defense argued that Goyal had been conducting legitimate business activities through his firm for years and was willing to cooperate in the investigation. Reference was made to previous judgments to support the anticipatory bail application, emphasizing the need for finalizing assessments before taking coercive actions. Medical grounds were also cited to support the bail plea, backed by medical documents submitted as evidence.3. The prosecution countered the defense's claims, stating that the submitted panchnama was irrelevant to the ongoing proceedings and accused Goyal of non-cooperation by failing to appear despite multiple summons. The prosecution differentiated the present case from previous judgments cited by the defense, highlighting the lack of cooperation from the accused as a crucial factor in denying the anticipatory bail.4. The court scrutinized the defense's argument regarding payments made by Goyal's firms to showcase their bona fide intentions. However, the lack of supporting documents and a dispute raised by the Department undermined this defense, leading to the dismissal of the bail application. The court emphasized the importance of substantiated claims and cooperation in investigations, ultimately denying the anticipatory bail based on the presented evidence and arguments.