TaxTMI 
TaxTMI 
2021 (6) TMI 382
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....matter canvassed are that a large number of fraudulent business transactions were made using several fictitious firms, including, M/s. Nayak Enterprises, M/s. Sahoo Enterprises, M/s. Mohanty Sales Agencies, M/s. Maa Bhawani Enterprises, M/s. Binash Enterprises, M/s. Sangeet Hotels and others. These several functionally vacuous entities were found to have been fraudulently registered under the OGST Act, 2017 by the present petitioner in collusion with other persons. Several persons have been beguiled into lending their name and documents for the purpose of registration of these 12 manikin firms on the false pretext of providing them gainful employment, arranging loans from commercial banks or providing them with monthly stipend. These identity documents have been misappropriated for the purpose of obtaining registration certificate under the GST Act in order to masquerading fake business transactions with an intention to defraud the state exchequer. 3. Such a modus operandi of creation of these dummy and sham firms, has been highlighted on numerous occasions in the past. The petitioner and other accused were predominantly engaged in pedalling of bogus input tax credit secured on th....
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....ther been brought to this Court's notice that the statement by co-accused, Smruti Ranjan Mohanty reflects that the petitioner was in charge of the accounts for a few of the fake entities involved and used to send pdf copies of e-way bills, GST payment challans, user IDs and passwords for the GST related information of the aforementioned fake business entities in close connivance with the other accused. However, upon being presented with this section of the statement by co-accused, one Smruti Ranjan Mohanty, the petitioner denied having any role in the abovementioned business entities. This, therefore, seems to be a prima facie case which has more to it than meeting the eye and might need a deeper probe. 6. Pertinently, the search and inspection conducted by the State authorities have revealed that no business was actually being conducted at the declared place of business, the purchases and sales shown in the name of the fictitious firms were mostly paper transactions without any actual movement of goods. In some cases, the goods were purchased from fictitious sources without payment of tax and the same has been fraudulently regularized by raising invoices in the name of the dummy ....
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....sion of economic offences which are considered grave and therefore must be viewed seriously. Offences of this nature affect the economy of the country as a whole and usually involve a deep-rooted conspiracy to cause huge loss of public funds wherein the individual would rather achieve personal gains through illicit means than act in the best interest of the society. Although this Court is cognizant of the fact that in some similar matters the accused persons have been admitted to bail, however, every case turns on the facts and circumstances of the case itself. In the instant case, the aspect of conspiracy seems to be forthcoming inasmuch as the co-accused persons have named each other an aspect which is of sanguine consequence. 10. The law relating to bail in cases of economic offences is more or less settled in view of the decisions of the Hon'ble Supreme Court of India. At this juncture, it is relevant to take note of the view expressed by the Hon'ble Supreme Court in the case of Nimmagadda Prasad vs. Central Bureau of Investigation (2013) 7 SCC 466 wherein it has been held that - "23. Unfortunately, in the last few years, the country has been seeing an alarming rise in w....
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....s affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country." Furthermore, in the case of Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation (2013) 7 SCC 439, the Hon'ble Supreme Court opined that; "35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." 11. It is also observed that while investigation has begun, the same is still going on as more evidence is being unearthed. There have been instances where the petitioner has rendered inconsistent statements and therefore, securing his presence so that he does not try to sabotage the investigation or flee could be deemed necessary. In Adri Dharan Das v. State of W.B. (2005) 4 SCC 303, the Hon'ble Supreme Court opined that; "19. Ordin....