TaxTMI 
TaxTMI 
2021 (5) TMI 291
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....ing Director of M/s. Global Space Technologies Limited ('GSTL'). Petitioner states that search and seizure had been carried out on its premises in October, 2020. Summons had been issued to petitioner to attend office of respondent no. 2 - Superintendent (Anti Evasion), CGST on 19.10.2020. Since the petitioner had been out of town, accountant of petitioner had been to respondent no. 2. He had furnished solicited information about it's Directors, office location etc.. Two emails had also been issued providing details viz. tally and ledgers etc. 3. The petitioner had been summoned on various dates thereafter on 09.03.2021, 12.03.2021, 17.03.2021, 19.03.2021, 22.03.2021 and 23.03.2021. The petitioner had attended all the dates except one while he had undergone angioplasty. On 23.03.2021, he was arrested. On the next date, he was produced before the Magistrate, Belapur seeking remand. On the very day, the petitioner had filed an application for bail. 4. In the remand application by respondents before the Magistrate, several allegations had been made against petitioner, inter alia, that he had not deposited with the government tax collected to the tune of Rs. 6,30,00,000/- referrin....
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.... 15/02/2021, wherein, based on supreme court judgments, it has been observed that, bail and not jail is the rule in the cases not involving heinous offences like rape, murder, terrorism etc. and that the case against him was not even at pre-trial stage where there had been no formal accusation in any form viz. FIR / complaint. It is submitted that the ratio in case of Daulat (supra) squarely applies to the present matter. 7. It is submitted that search and seizure has been carried out and alleged fake invoices, balance-sheets, ledgers etc. have already been taken in possession for conducting further investigation and as such, custody of petitioner would not be required. 8. Mr.Ponda submits that the statements made by the petitioner or appearing against the petitioner, would not be per se admissible in evidence and in the case of Daulat (supra), it has been observed that section 136 of the CGST Act would roll in to play when trial would commence further highlighting that an admission of a person before revenue officials under CGST Act would not be ipso facto admissible in evidence unless it receives acceptance from the court. 9. He submits that there is no rationale and int....
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....on observations of this court in the cases involving similar factual aspects. 14. On the other hand, Mr. Mishra, learned Counsel for revenue refers to and relies on the application for remand contending that the petitioner is engaged in evasion of goods and services tax by collecting taxes and not paying the same to the government, is suppressing taxable value of supply for payment of tax and is availing Input Tax Credit ('ITC') on purchase of goods and services not received by him and in using ineligible credit for payment of taxes on their outward taxable supply. Premises of GSTL were searched on 15/10/2020 and incriminating documents were seized under panchanama and it has been unearthed that the company has collected tax to the tune of Rs. 6.3 Crore but has not deposited with the government. During the investigation, it has been gathered that GSTL is engaged in clandestine supply of goods and services without payment of taxes and without accounting the same in the returns filed with the department. From the documents retrieved, it has surfaced that GSTL has supplied goods and services to the tune of Rs. 35 Crores and the same fact has been confirmed from one of the recipient....
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....asons as to why the petitioner is required in custody, when the petitioner had attended the office of the respondent as and when he had been summoned. It is being submitted that it is not the case that there had been any custodial interrogation worth reference. It has been referred to that the custody sanctioned under remand, no significant progress has taken place and having regard to decision in Arnab Manoranjan Goswami Vs. State of Maharashtra & Ors., SCCOnline SC 964 and of this court in Daulat Mehta (supra), continued detention of petitioner is illegal. Moreover, arrest itself is illegal. There is no justification for keeping petitioner in custody any longer. 17. Aforesaid submissions are being countered on behalf of respondents submitting that detention of the petitioner is necessary looking at the magnitude of evaded tax as well as likelihood of unearthing much more evasion. Custody of petitioner is required not only for the purpose of interrogation, but with a view to ensure that petitioner does not tamper with documents and influence the witnesses. The submission on behalf of the petitioner that the petitioner is cooperating with the investigation is disputed contending....
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....pra) would show that in paragraphs 11 and 12, the provisions of section 69 and 132 have been taken into account and it has been observed that in Daulat's case (supra), this court has analyzed the powers conferred on the Commissioner under section 69. Recording of 'reasons to believe' by the Commissioner that a person has committed offence and is required to be arrested is sine qua non for exercising the powers. It has also been observed that not only recording of reasons would be that a person has committed offence as specified, but also that as to why the person needs to be arrested, the court has highlighted that CGST Act is primarily for collection of revenue and arrest is incidental to achieve said objective and the arrest is subject to provisions of the Code of Criminal Procedure, 1973, containing sections 41 and 41A. The court has found that if the amount of tax evaded or ITC wrongly availed or utilized or amount of refund wrongly taken exceeds Rs. 5 Crores, then the sentence is imprisonment for a term which may extend to 5 years and all other sentences are below 5 years. While maximum sentence that can be imposed for commission of offence under section 132(1)(b) and (c) is 5....