2024 (1) TMI 977 - HC - GST

Anticipatory bail confirmed for accused in Rs.198 crore GST fraud case involving fake cigarette bills under Section 70 CGST Act

Directorate General of GST Intelligence Versus Jitender Kumar

Delhi HC confirmed anticipatory bail granted to accused in GST fraud case involving fake cigarette purchase bills and ITC reversal worth Rs.198 crores. ... Validity of grant of anticipatory bail by the lower court - fake bills were made for the purchase of the cigarettes - Reversal of ITC - HELD THAT:- In Choodamani Parmeshwaran Iyer [2023 (7) TMI 1008 - SUPREME COURT], the Supreme Court has observed that if any person is summoned under Section 69 of the CGST Act for the purpose of recording his statement, provisions of Section 438 of the CrPC cannot be invoked. In the said case, the accused persons were not appearing before the authorities despite repeated summons being issued to them and had filed an application seeking anticipatory bail. It was in those circumstances that the Supreme Court made the aforesaid observations. In the present case, it has rightly been contended on behalf of Jitender Kumar that one of the co-accused persons, Manish Goyal, was arrested by the DGGI and therefore, there was a genuine apprehension of arrest. From the material on record, it appears that Jitender Kumar was not the main player involved in the GST fraud and was acting on instructions from the main accused Chirag Goel and Chaman Goel. It is the case of the DGGI itself that out of the receipt of GST refund of Rs.198 crores by M/s Harsha International Rs.195 crores were transferred to M/s Radiant Traders. Even otherwise, Jitender Kumar has clean antecedents and has been co-operating in investigation and has given his statement under Section 70 of the CGST Act. Though, this Court is confirming the anticipatory bail granted to Jitender Kumar, he is warned that in the future, if he does not appear pursuant to summons issued by the DGGI, his anticipatory bail would be liable to be cancelled. However, the DGGI shall give a notice of at least 48 hours to appear pursuant to the issuance of summons - Liberty is given to the DGGI to seek cancellation of anticipatory bail in the event Jitender Kumar fails to appear in a timely manner pursuant to summons issued. The present petitions are dismissed. Issues involved:The issues involved in this case are the grant of anticipatory bail to the respondent accused Jitender Kumar by the learned Additional Sessions Judge (ASJ) and the subsequent dismissal of the petition seeking cancellation of the anticipatory bail by the DGGI.Grant of Anticipatory Bail:The Directorate General of GST Intelligence (DGGI) filed a petition seeking the setting aside of the order granting anticipatory bail to Jitender Kumar. The DGGI contended that the provisions of Section 438 of the Code of Criminal Procedure are not applicable to cases involving offenses under the CGST Act. It was argued that Jitender Kumar was involved in a serious economic offense related to GST evasion amounting to Rs.218 crores. The DGGI highlighted discrepancies in the business activities of the involved companies and the testing results of seized smoking mixtures. However, the court found that Jitender Kumar was not the main player in the fraud, had clean antecedents, cooperated in the investigation, and sustained the grant of anticipatory bail.Cancellation of Anticipatory Bail:The DGGI sought the cancellation of Jitender Kumar's anticipatory bail on the grounds of non-compliance with bail conditions. The DGGI alleged lack of cooperation in the investigation and failure to deposit the passport with the Investigation Officer. However, the court found that Jitender Kumar had cooperated in the investigation, and the passport issue was resolved as it had expired and was not renewed. The court also addressed the reversal of Input Tax Credit and the condition of leaving NCR without informing the IO. Ultimately, the court declined to interfere with the orders granting anticipatory bail and dismissed the petitions, emphasizing that Jitender Kumar must strictly comply with the imposed conditions.Conclusion:The court confirmed the grant of anticipatory bail to Jitender Kumar, warning him to comply with future summons from the DGGI. The DGGI was granted liberty to seek cancellation of anticipatory bail if Jitender Kumar fails to appear promptly. The court dismissed the petitions, clarifying that the observations made were solely for bail decisions and not indicative of the case's merits.