2023 (3) TMI 681 - HC - GST

ITC fraud case pre-arrest bail rejected for non-cooperation with investigation despite multiple summons

Bombay HC rejected pre-arrest bail application in ITC fraud case involving fraudulent registration for Input Tax Credit utilization. Applicant failed to ... Application for pre-arrest bail - Fraudulent availment of ITC - allegation is that the third party or operator obtained the registration with the intent to utilize the Input Tax Credit (ITC) - HELD THAT:- It prima facie appears that the matter needs to be investigated thoroughly by the first respondent. The applicant must cooperate with the investigation. On the basis of the materials i.e. whatsapp chats, the statements of the accused, invoices, the first respondent is justified in contending that it is necessary to record the statement of the applicant to find out his involvement in the case and other operators of the scam of ‘M/s. Platinum Trading Company’. The applicant has not attended to record his statement despite issuing witness summons on 20/5/2022, 30/5/2022 and 3/6/2022 and he is not cooperating with the investigation. In paragraph 9 of the reply filed by the first respondent, it is stated that in the summons to witness the first respondent never mentioned about the arrest of the applicant. The first respondent just wants to record his statement and to verify any books of account he is having regarding M/s. Platinum Trading Company. From the record it appears that the applicant is not cooperating with the investigation and even not willing to attend pursuant to the issuance of the witness summons - the present application is premature and the apprehension that the applicant will be arrested without following due procedure of law is unfounded. The first respondent is bound to comply with the mandate of the law and upon adhering to the dictum laid down by the Hon’ble Supreme Court before effecting arrest. The apprehension of the applicant that he will be arrested is without any basis. The applicant is not cooperating even for the purpose of recording his statement pursuant to the issuance of the summons to witness. The first respondent submitted that they have reasons to suspect the involvement of the applicant. Undoubtedly, after recording the statement, if the first respondent had reason to believe that the arrest is imperative, the applicant may at that stage have an apprehension that he is likely to be arrested. It is open for the applicant at the appropriate stage to apply for anticipatory bail. The applicant must first cooperate with the investigation which according to the first respondent is only for the purpose of recording his statement and to verify the books of accounts the applicant is having regarding M/s. Platinum Trading Company. Reserving the liberty of the applicant to apply for anticipatory bail, at a later stage, the present application is rejected as premature. Issues involved: Application for pre-arrest bail under Section 132 of the Maharashtra Goods and Services Tax Act, 2017.Summary:1. The applicant, a proprietor of 'Riddhi-Siddhi Enterprises', faces arrest for an offence under Section 132 of the MGST Act related to 'Platinum Trading Company' and alleged fraudulent ITC transactions.2. Allegations involve passing ITC without supplying goods, with statements from involved parties like Prakash Agarwal and Salimullah Khan implicating the applicant indirectly.3. Previous arrests of individuals connected to the investigation, including Salimullah Khan and Kanak Jain, have taken place.4. The applicant sought anticipatory bail after summons were issued, but the Sessions Court rejected the application without providing reasons.5. Arguments presented by both sides focus on the applicant's cooperation with the investigation, evidence like whatsapp messages and invoices, and the necessity of recording the applicant's statement.6. The Court finds the application premature, emphasizing the need for the applicant to cooperate with the investigation, attend for statement recording, and reserves the right to apply for anticipatory bail at a later stage.7. The applicant is directed to cooperate with the investigation, attend for statement recording, and is given liberty to apply for anticipatory bail in the future if needed.