TaxTMI 
TaxTMI 
2022 (9) TMI 1105
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....cks have an invoice value of almost about 6.5 lacs but as per the Department, they may have been under invoiced. It is claimed that thereafter, 3 sellers, namely, Shiv, Jitender and Kewal were questioned and at least, one of them has been arrested in the present case. In all, they have admitted having sold raw Tobacco amounting to about 75 trucks to fictitious firms, most of which raw Tobacco ended at the factory of the B.G. Tobacco Noida. On being questioned, IO has claimed that role of certain other persons/factories at Patparganj has come forth but he does not wish to disclose because of the sensitive nature of the information. It is submitted that if this unfinished raw Tobacco was processed in the factory of the accused and clandestinely sold in the grey market, it would have amounted to evasion of, at least, Rs.83 crores. Although, the IO has claimed that he suspects that, at least, 287 trucks of raw Tobacco might have gone to the factory of the applicant/accused but the figure of 33 has been arrived at only on the basis of GPS data traced by the IO in the present case. 2. It is further the case of the Investigation Agency that the factory premises of the applicant/accused w....
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....s in the name of private individuals which were used as a front by the applicant/accused to show purchase of Tobacco transported in these 33 trucks. These goods, according to him, never reached the said alleged firms registered at different places such as Sonipat but were, ultimately, transported to the factory of the applicant/accused and therefore, these firms were acting as shell firms/entities. However, on being questioned, the IO has stated that none of the alleged proprietors of the so called fictitious purchaser firms had been arrested or traced so far. No statement that they had no knowledge of these firms have been recorded. It is the case of the IO that these are non existent firms, where registration was obtained by obtaining the OTP on SIM card that may very well be in possession of the CA or applicant/accused. In any event, investigation on this aspect is definitely lacking so far. He had submitted that the custody of the applicant/accused is required so that the clandestine production can be stopped and the Department can prevent any further tax evasion on part of the applicant/accused. 7. Counsel for the applicant/accused has pointed out that the submission made by ....
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....he production, if any, has taken place at Noida factory of the applicant/accused and there are no allegations that the production was being carried out by applicant clandestinely at any other factory premises of which the Department is not aware of or which is being investigated upon then the Department has not been able to show any production or storage of unaccounted raw Tobacco or finished product at the factory during raid. Further, the claim that 33 trucks of raw unaccounted Tobacco ended up at the factory is not supported by a claim as to how finished products were transported out. Counsel has relied upon the decision in Sushila Aggarwal Vs. State of NCT of Delhi decided on 29.01.2020, wherein it has been noticed that an order of anticipatory bail does not in any manner does not limit or restrict the rights or duties of the police or investigating agency, to investigate into the charges against the person who seeks and is granted pre arrest bail. 14. Counsel has further relied upon the decision in Ameet Khandelwal Vs. State of NCT of Delhi decided on 23.04.2021 by Hon'ble High Court of Delhi and more specifically on para 22 of the said judgment as well as decision of Kerala ....
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....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 subsection (1) of section 132; and (f) any other class of persons or offences as may be prescribed: Provided further that any compounding allowed under the provisions of this section shall not affect the proceedings, if any, instituted under any other law: Provided also that compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences. The amount for compounding of offences under this section shall be such as may be prescribed, subject to the minimum amount not being less than ten thousand rupees or fifty per cent. of the tax involved, whichever is higher, and the maximum amount not being less than thirty thousand rupees or one hundred and fifty per cent. of the tax, whichever is higher. (3) On payment of such compounding amount as may be determined by the Commissioner, no further proceedings shall be initiated under this Act against the accused person in respect of the same offence and any criminal proceedings, if already initiated in respect of the said offence, shall stan....
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....such a power is similar to the powers exercised by a civil court under the Civil Procedure Code, 1908. Subsection (2) further clarifies that every inquiry in which summons are issued for tendering evidence or for production of documents is to be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Penal Code, 1860. 36. There is no embargo under the CGST Act restraining the petitioner from seeking prearrest bail. Economic offences such as tax evasion, money laundering, etc. affect the economy of the country and thus are considered grave in nature. To deter persons from indulging in such economic offences, criminal sanctions are required to be imposed. One of the most prominent criminal sanctions imposed with regard to economic offences is that of arrest. It is widely acknowledged that arrests result in deprivation of liberty of a person. Thus, while it is imperative to maintain law and order in society, the power to arrest must also always be subject to necessary safeguards. Against this backdrop, analysing the arrest provisions under the Goods and Services Tax Law, with a view to study the adequacy of the safeguards and authorisation built into the....
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.... February 2022. Ld. Counsel for the Department has pointed out that no matter what the counsel for applicants/accused contended today in court, there is no retraction on any of the statements already recorded. He has also shown me relevant portions of the statements so recorded, more specifically, the statements of Sh. Krishan Kant Pandey, Sh. Laxmi Kant Pandey, Sh. Shashi Kant Pandey and Sh. Mukesh Dwivedi besides few other statements. Ld. Counsel for Department has pointed out that the Agency is facing difficulty in conducting investigation in the present case as despite repeated notices, the employees, agents and the Directors of the accused company are not appearing or cooperating with the investigation. He has pointed out that the accused persons have admitted that the Directors on record are only dummy Directors and it was the accused persons who were running the business of the company. Even the statement of Sh. Mukesh Dwevedi points out that all the business was being carried out on the instructions of the accused persons and money collected from the clandestine sale was paid to the accused persons directly. Ld. Counsel has also pointed out that there is a web of small ....
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.... the accused persons have not responded to the summons because of any threat or inducement by the applicants/accused. The entire case is based on a presumption that 33 trucks dropped raw material at the factory which was unaccounted, but there is no claim as to how the finished products were removed from the factory. Raw material and finished products are two sides of the same coin and one is directly corelated to the other. Further, the searches carried at the premises did not yield even a single piece of evidence or presence of unaccounted raw material or finished product. None of the alleged proprietors have been examined, who may have disowned the registered firms as not their's. Needless to say that the initial trucks having been intercepted in June 2022 and the raid having been carried out in August 2022, Department based on its knowledge could have intercepted any other unaccounted finished product being shipped out. Where, when and how the finished product could disappear in these circumstances? 22. Merely, because statement of the accused has to be recorded, is not a reason for declining pre arrest bail to the accused. Further, the stand of the IO that accused is require....