TaxTMI 
TaxTMI 
2018 (12) TMI 1350
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Adesh Jain were arrested with the allegations that they were involved in generation of fake invoices by floating dummy companies/firms in the name of poor persons I third persons and of passing on the input tax credit (in short, 'ITC') to unscrupulous persons / firms/ companies without actual supply of goods. This was done with the malafide intent to pass on the undue advantage of ITC to various companies / firms for utilizing the bogus GST ITC so generated. In return, accused / respondent and the co-accused were taking commissions at various rates. This activity of the accused/ respondent and of the co-accused was found involving fictitious sales of the value of Rs. 201 crores and of the amount of tax evasion of more than Rs. 27 crores. 4. It is averred that when the accused I respondent alongwith the co-accused was produced before the Ld. Link MM, it was noted by the Ld. MM vide his order dated 01.08.2018 that the offence stated to be made out against the accused persons falls under the provisions of Sec. 132 (1)(b) of the CGST Act, 2017 and that as per the mandate of the law as provided under clause (4), all the offences under this Act except the offences referred to in sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the tune of Rs. 50 crores and is increasing with each passing Step of the investigation. 6. It is averred that the modus operandi of the accused/respondent is that he floated various bogus firms by using the name of poor persons. less educated and unemployed individuals by luring them with consideration ranging from Rs. 12,000/- to Rs. 15,000/-. In return, these individuals used to hand over their Aadhar Card, PAN card, bank account details and registered mobile number to the accused/ respondent for using the same for OTP verification in the process of making them become the proprietors of the bogus firms. The accused/ respondent was actively assisted by the co-accused Adesh Jain and that these two used to take documents from the dummy proprietors for its use in government authorities for the purpose of taking Statutory registrations such as GST etc. The accused were aware that the government having eased the norms of operating business, is not requiring any human interface of the dummy proprietor with any of the GST official and the identity of the said individual becomes the identity as is made available through the PAN Card, Aadhar Card etc. It is with this knowledge that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....legedly evaded. It is averred that the law is well settled by the Hon'ble Supreme Court of India in DoIat Ram & ors vs state of Haryana, (1995) 1 SCC 349 = 1994 (11) TMI 424 - SUPREME COURT wherein it was held that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of bail, already granted. It is averred that in the application I petition, no cogent or overwhelming Circumstance has been shown meriting cancellation of bail. Instead, false and vague averments have been made in the application which are not substantiated by any document or material. 10. It is further averred that the application proceeds on a wrong notion that every offence under the CGST Act, 2017 is cognizable and non-bailable. In fact, except of few offences u/s 132 of the Act, all other offences are non-cognizable and bailable. Also, the maximum punishment provided u/s 132 of the Act is of five years and that the accused/ respondent had appeared before the authority as and when he was called upon by issuance and service of summons. As such, the present application is against the spirit and mandate of the law laid down by Hon'ble Supreme Court in Arnesh Kumar vs stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 14.08.2018, it Was never asserted that the accused/ respondent is threatening witnesses. Even otherwise, the alleged Statements of the witnesses placed with the record of present application are of 17.08.2018 and 21.08.2018, which in any case, is after the order dated 14.08.2018. It is averred that even the perusal of the alleged statements of the witnesses that they have been threatened would reveal that it has been typed in a standard format and that it is a pointer that these are false statements. Thus, prayer was made to not only dismiss the application of the applicant /petitioner but also to prosecute the applicant I petitioner u/s 340 Cr.PC. 13. Sh. Harpreet Singh, Ld. Senior Standing Counsel for the applicant / petitioner and Sh. J. K. Mittal, Id. Counsel for the accused/respondent were heard and the record was carefully perused. 14. In his submissions, Id counsel for the applicant/petitioner while making a reiteration of the facts as asserted in the application, placed reliance upon the judgment of Hon'ble Supreme Court of India in Prahlad Singh Bhatti vs. NCT of Delhi, AIR 2001 SC 1444 = 2001 (3) TMI 1053 - SUPREME COURT OF INDIA. 15. Ld. Counsel for the accuse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... commission of any of the offences mentioned in clause (a) to (k) of this section. shall be punishable:- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine. (ii) in cases where the amount of tax evaded or the amount of input tax credit Wrong availed or utilized or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine. (iii) In the case of any Other offence...... (iv) In cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. (2) Where any person convicted of an offence under this section is again convicted.... (3) the imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall.... (4) Notwithsta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y, the file which has been produced by the applicant/ petitioner clearly notes in the note-sheet of the inquiry that the accused / respondent as well as the co-accused Adesh Jain in their respective statements recorded u/s 70 of CGST Act on 31.07.2018 have stated that they both were indulging in the act of providing false invoices to other companies I firms/ agents and thus were passing on wrongful' availment of input tax credit. They also stated. that they were deducting the commissions for the said act. The total tax evasion as alleged at that time was against both the accused and it was of the value of more than Rs. 27 crores and not of less than Rs. 5 crores against the accused / respondent. Thus, the case against the accused/ respondent as also against the co-accused Adesh Jain was of the offence punishable under clause (i) rlw sec. 132(1)(b) of the Act. In such circumstances, the accused/respondent ought to have been remanded to judicial custody instead of being admitted to bail. Going further, even if it is to be believed that the amount of alleged tax evasion as on the date of production of the accused/respondent upon his arrest was less than Rs. 5 Crores, still the applica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....who have alleged that they are being threatened by the accused / respondent cannot be believed as these statements are doctored statements having been prepared only to Cause undue harassment to the accused/ respondent and to falsely implicate him in the present case. This contention of Id counsel has no basis as this is not the Stage to conduct an inquiry as to the veracity of these statements. The assertion of the department that the accused/respondent is threatening the witnesses and as such is affecting the investigation is based on the statements of the witnesses recorded to the said effect and having been shown during the course of advancing arguments and also of having been filed with the present application. I may also here gainfully refer to the judgment of Hon'ble Supreme Court of India in Kanwar Singh Meena vs State of Rajasthan & Anr, Crl. Appeal No. 1662/2012 decided on 16.10.2012 = 2012 (10) TMI 1114 - SUPREME COURT wherein it Was observed that "Section 439 of the Code confers very wide powers on the High Court and the Court of Sessions regarding bail. But, while granting bail, the High Court and the Sessions Court are guided by the same considerations as other courts.....