TaxTMI 
TaxTMI 
2021 (12) TMI 135
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....n. 2. Before adverting to the submissions made by learned counsel for the parties, it is essential to highlight the factual background of the matter. FACTUAL MATRIX 3. The petitioner is one of the directors in M/S Jetibai Grandsons Services India Pvt. Ltd (hereinafter, referred to as "Company"), a company incorporated in August 2019. The company was initially involved in the supply of services however, it subsequently started manufacturing and supplying solar inverters, solar power generating units and like products. 4. The respondent has alleged that the Company of which the petitioner is a director, along with other firms namely M/s Microlyte Energy (P) Limited, M/s Sun Automation Limited, M/s Urja Global Limited and M/s NYX Industry India (P) Ltd. are involved in fraudulently availing and passing on ineligible/fake Input Tax Credit amounting to Rs. 72,00,00,000/- (Rupees Seventy Two Crores). 5. The respondent has alleged that the Company made most of its purchases from three firms namely - M/s Microlyte Energy (P) Limited, M/s Sun Automation Limited, and M/s Urja Global Limited. It has been alleged that these three firms further received these goods from various f....
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....etitioner was forced to deposit. The matter was listed before the High Court on 24th September, 2021 for hearing, wherein the Court allowed withdrawal of the petition with liberty to file appropriate proceedings in accordance with law. In the course of same proceedings, an assurance was given by the learned counsel of the petitioner that the petitioner will appear before the officers of the respondent on 8th October, 2021. However, subsequently, it was brought on record that the assurance was made by the learned counsel for the petitioner without taking instruction from the petitioner. 11. The petitioner subsequently filed an application for Anticipatory Bail bearing Bail Application No. 2037/2021 before the Court of Additional Sessions Judge, Patiala House Court, New Delhi. The Additional Sessions Judge rejected the application vide order dated 9th October, 2021 inter alia observing that the petitioner's role in the formation of shell companies seem to be apparent and that there was nothing on record to indicate that the alleged transactions were carried out with genuine firms. It was also observed that the investigation was at the nascent stage and there was a possibility of t....
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....sel appearing on behalf of petitioner submitted that the power of arrest is an extreme provision and should be exercised with utmost care and not arbitrarily. The learned counsel further submitted that the apprehension for arrest arises from the fact that three persons related with suppliers and buyer company of the petitioner were arrested despite appearing regularly and furnishing all the relevant documents/information as required by the respondent. 19. Learned counsel appearing on behalf of petitioner submitted that since the entire evidence present in the case is based on documents and therefore, his custodial interrogation is not required. It is also submitted that the other co-accused has already been enlarged on the bail vide order dated 30th September, 2021 by the Coordinate Bench of this Court. 20. On instructions, learned counsel appearing on behalf of petitioner also undertakes that the petitioner shall appear before the concerned authority whenever it is required. He also undertakes that the petitioner shall abide by any condition imposed by this Court while granting anticipatory bail. 21. The learned counsel for the petitioner for buttressing his arguments pla....
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....eriously and India is a Member of international Forum viz. "Financial Action Task Force" and has committed itself to the global resolve of being firm with money laundering offence, irrespective whether petitioneraccused is the former Finance Minister and former Home Minister or an ordinary citizen of India, it will be travesty of justice if this Court considers the prayer made by the petitioner and grant him protection of pre-arrest bail, without examining the case records, investigation material maintained in regular course of the present statutory investigation conducted and which contains the evidence which is incapable of being fabricated as loosely alleged on behalf of the accused." Upon perusal it came to the notice of the Court that the aforementioned decision has been reversed by the Hon'ble Supreme Court in the case of P. Chidambaram v. Directorate of Enforcement (2020) 13 SCC 791. Further, the extracted portion as being cited is not the observation of the court but a submission made by the counsel in the case, and hence cannot be entertained by this Court. 26. In their reply to the status report, apart from reiterating the submissions earlier made, it has been state....
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.... to (d); (f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act; (g) obstructs or prevents any officer in the discharge of his duties under this Act; (h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder; (i) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder; (j) tampers with or destroys any material evidence or documents; (k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false informa....
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.... Explanation.- For the purposes of this section, the term "tax" shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act. 31. Chapter XIX deals with offences and penalties. Section 132 provides for punishment for committing certain offences. As per subsection (1), whoever commits any of the twelve offences mentioned therein shall be punished in the manner provided in clauses (i) to (iv) of sub-section (1). In this case, we are concerned with offences under clauses (b) and (c) of sub-section (1). As per clause (c), the offence is availing input tax credit using invoice or bill without the supply of goods or services or both in violation of the CGST Act; and as per clause (b), a person who issues any invoice or bill without supply of goods or services or both in violation of the provisions of the CGST Act or the rules made there under leading to wrongful availment or u....
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....hat nothing contained in this section shall apply to- (a) a person who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f) of sub-section (1) of section 132 and the offences specified in clause (l) which are relatable to offences specified in clauses (a) to (f) of the said subsection; (b) a person who has been allowed to compound once in respect of any offence, other than those in clause (a), under this Act or under the provisions of any State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act or the Integrated Goods and Services Tax Act in respect of supplies of value exceeding one crore rupees; (c) a person who has been accused of committing an offence under this Act which is also an offence under any other law for the time being in force; (d) a person who has been convicted for an offence under this Act by a court; (e) a person who has been accused of committing an offence specified in clause (g) or clause (j) or clause (k) of sub-section (1) of section 132; and (f) any other class of persons or offences as may be prescribed: Provided further t....
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....have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908." 35. Chapter XIV of the CGST Act deals with inspection, search, seizure and arrest. It consists of sections 67 to 72. Section 70 deals with power to summon persons to give evidence and produce documents. As per sub-section (1), the proper officer under the CGST Act has the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any enquiry in the same manner as provided in the case of a civil court under the provisions of the Civil Procedure Code, 1908. Thus, Section 70 (1) confers the power on the proper officer to summon any person whose attendance he considers necessary to either tender evidence or to produce documents etc. in any enquiry. Exercise of such a power is similar to the powers exercised by a civil court under the Civil Procedure Code, 1908. Sub-section (2) further clarifies that every inquiry in which summons are ....
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....een filed under Section 438 of the Code, which specifically calls for decision on anticipatory bail. The Special leave petition against this decision has been dismissed by the Hon'ble Supreme Court. 40. On the other side, the case of Shravan. A Mehra v. Superintendent of Central Tax, Anti evasion, Commissionerate Manu/KA/ 0875/2019 is the one that squarely applies to the present case. In this matter, bail was granted in relation to offences under the Act in view of the fact that the offences were not punishable with imprisonment for more than five years. In this case, the petitioner was alleged of having obtained Invoices from the Company of the respondent without delivery of the goods and thereby evading payment of tax and committing an offence under Section 132(1)(b) of the Act. Therein, the petitioner once appeared before the authorities concerned but on a subsequent summon, they were apprehending arrest because another witness who was called to tender statement was arrested by the police. Thus, an application for anticipatory bail was filed before the court. The court after analysing the provisions of the Act held as under: "On close reading of the above said Sectio....
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....rant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave ec....
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....go that duty, leaving this Court to intervene at all times. We must in particular also emphasise the role of the district judiciary, which provides the first point of interface to the citizen. Our district judiciary is wrongly referred to as the "subordinate judiciary". It may be subordinate in hierarchy but it is not subordinate in terms of its importance in the lives of citizens or in terms of the duty to render justice to them. High Courts get burdened when courts of first instance decline to grant anticipatory bail or bail in deserving cases. This continues in the Supreme Court as well, when High Courts do not grant bail or anticipatory bail in cases falling within the parameters of the law. The consequence for those who suffer incarceration are serious. Common citizens without the means or resources to move the High Courts or this Court languish as undertrials. Courts must be alive to the situation as it prevails on the ground-in the jails and police stations where human dignity has no protector. As Judges, we would do well to remind ourselves that it is through the instrumentality of bail that our criminal justice system's primordial interest in preserving the presumption....
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....'ble Supreme Court in the case of Nathu Singh v. State of U.P. (2021) 6 SCC 64 has called for a liberal interpretation in the cases relating to grant of anticipatory bail, when it observed: "19. At first blush, while this submission appears to be attractive, we are of the opinion that such an analysis of the provision is incomplete. It is no longer res integra that any interpretation of the provisions of Section 438 CrPC has to take into consideration the fact that the grant or rejection of an application under Section 438 CrPC has a direct bearing on the fundamental right to life and liberty of an individual. The genesis of this jurisdiction lies in Article 21 of the Constitution, as an effective medium to protect the life and liberty of an individual. The provision therefore needs to be read liberally, and considering its beneficial nature, the courts must not read in limitations or restrictions that the legislature have not explicitly provided for. Any ambiguity in the language must be resolved in favour of the applicant seeking relief." 49. Since, the genesis of the statutory right to anticipatory bail can be found under Article 21 of the Constitution, it is essenti....
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....ose conditions limiting relief in terms of time, or upon filing of FIR, or recording of statement of any witness, by the police, during investigation or inquiry, etc. While considering an application (for grant of anticipatory bail) the court has to consider the nature of the offence, the role of the person, the likelihood of his influencing the course of investigation, or tampering with evidence (including intimidating witnesses), likelihood of fleeing justice (such as leaving the country), etc. The courts would be justified - and ought to impose conditions spelt out in Section 437(3) CrPC [by virtue of Section 438(2)]. The need to impose other restrictive conditions, would have to be judged on a case-by-case basis, and depending upon the materials produced by the State or the investigating agency. Such special or other restrictive conditions may be imposed if the case or cases warrant, but should not be imposed in a routine manner, in all cases. Likewise, conditions which limit the grant of anticipatory bail may be granted, if they are required in the facts of any case or cases; however, such limiting conditions may not be invariably imposed. 92.4. Courts ought to be gen....
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....y bail application i.e., the liberty of the accused and the interest of the investigative authorities for discovering the particular of offence. It is the case of the Petitioner that he failed to appear due to his ill health, which evidently no more exists. The other ground pertains to apprehension of arrest, which can be removed by allowing the present application. It is very well possible that the respondent department might get the information as required if the Petitioner cooperates with the authorities concerned and arrest might not be necessary. 55. Custodial interrogation in the instant matter is neither warranted nor provided for by the statute. Detaining the petitioner in Judicial Custody would serve no purpose rather would adversely impact the business of the petitioner. 56. It is without an iota of doubt that the Petitioner needs to be more cooperative in investigation, joining the same as and when required for, by the Respondent. In the present case, the Petitioner has not appeared before the Respondent department on various occasions due to two main reasons mainly i.e., due to his own ill health on some occasions while on one occasion, he failed to appear due to ....