TaxTMI 
TaxTMI 
2021 (2) TMI 41
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....A'] was used for taking data from GSTIN. The Goods and Services Tax Department had information that three firms by the name of M/s La Mode Fashions, M/s Decent Fashions and M/s Murari Enterprises [hereinafter referred to as 'firms'] were engaged in availing and passing bogus Input Tax Credits ['ITC']. The firms had issued bills worth Rs. 158 crores involving Rs. 13.39 crores of tax. Firms had availed fake ITC of Rs. 21.60 crores and claimed refund of Rs. 5.02 crores. [5] The mechanism adopted by these firms was of procuring bills from Delhi based firms who had no purchases and further billing was done to export units for utilizing the ITC. These Firms had common partners i.e. Rakesh Kumar, Ms. Shreya Aggarwal and Mr. Ajay Gupta, all residents of Noida. A Chartered Accountant Ankur Garg and Vikas Gupta, GST Practitioner (not having requisite qualification) were arrested. They were also instrumental in getting the firms registered under the GST. As per their statements, Dharminder Arora @ Raja Bhaiya use to give them directions and they used to meet him at Hotel Park Plaza, Ludhiana. From the evidence collected from the Hotel, it was revealed that petitioner (Rakesh Arora) was act....
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.... under clauses (a) to (d) of Section 132 (1) of the Act, are non-bailable offences. The argument is that petitioner has not issued any bill or invoice for availing ITC, moreover the assessment is not complete. Delhi High Court's order in Anil Jain Versus Directorate of Revenue Intelligence (2007) 207 ELT 215 (Del.), is relied to state that bail was granted in similar circumstances. [8] The grievance is that arrest of the petitioner is in contravention of law laid down by the Division Bench of this Court in Akhil Krishan Maggu Versus Deputy Director of GST Intelligence (2020) 32 GSTL 516. It is submitted that case of the petitioner does not fall within the categories specified in judgment for arrest. [9] Learned senior counsel submit that powers under Section 69 of the Act should be used sparingly and reasons must be recorded for arresting. He relies upon judgment dated 20th October, 2020 of Gujarat High Court in Vimal Yashwantgiri Goswami Versus State of Gujarat (R/Special Civil Application No. 13679/2019). [10] Further reliance is placed upon order dated 16th June, 2020 passed in CWP-8131-2020 (Manoj Cables Limited Versus Union of India) and order dated 12th June, 2020....
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....hions to account of Saroj Bala. Later, there was a compromise which is on record of the bank. The amount was transferred back to the account of M/s Decent Fashions and petitioner signed the compromise, as a witness. It is further submitted that all the payments of ITC refund etc., received in the bank account of the firms were withdrawn in cash. [16] He defended the action taken under Section 132 and 69 by stating that reasons were duly recorded for arresting the petitioner and circumstances necessitated his arrest. [17] Contention is that the investigation is continuing as new information is still being unveiled. The name of one Mr. Khanna from Dubai has surfaced in the statement of the petitioner. He was the person who directed the petitioner to meet Ankur Garg. He fortifies opposition to bail by submitting that recently one Satish Sharma, Accountant of one Narinder Chugh was arrested. As per statement of Tarun, Narinder Chugh was also an active participant for creation of firms. [18] Heard counsel for the parties at length. [19] For deciding the petition for bail, the Court generally desists from considering the merits of the matter in detail. However, as learned sen....
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....n Alloys (P) Ltd (Supra), law laid down by Hon'ble Supreme Court in the case of Siddharam Satlingappa Mhetre (supra) as well keeping in mind Section 69 and 132 of CGST Act which empower Proper Officer to arrest a person who has committed any offence involving evasion of tax more than Rs. 5 Crore and prescribed maximum sentence of 5 years which falls within purview of Section 41A of Cr. P.C., we are of the opinion that power of arrest should not be exercised at the whims and caprices of any officer or for the sake of recovery or terrorising any businessman or create an atmosphere of fear, whereas it should be exercised in exceptional circumstances during investigation, which illustratively may be: (i) a person is involved in evasion of huge amount of tax and is having no permanent place of business, (ii) a person is not appearing inspite of repeated summons and is involved in huge amount of evasion of tax (iii) a person is a habitual offender and he has been prosecuted or convicted on earlier occasion, (iv) a person is likely to flee from country, (v) a person is originator of fake invoices i.e. invoices without payment of tax, ....
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....State or PAN-India. One ingenuine or bogus link in the chain has an impact on all. [33] In the case in hand, bills were being procured from the firms based at Delhi who had no purchases. The tax which was not deposited for these transaction was utilized by the firms for not only availing ITCs but for getting the refunds by showing the sales to export units. In other words, the refund was received for the tax which was actually never received by the Revenue. [34] In State of Gujarat Versus Mohanlal Jitamalji Porwal and others (1987) 2 SCC 364, the Supreme Court held as under:- "5. ....The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which....