TaxTMI 
TaxTMI 
2022 (10) TMI 311
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....ction 67(2) of the CGST and GST Act, a search was conducted on 20.06.2022 at the company and residential premises of the Directors, and on 22.07.2022, a letter along with order was issued under section 83 of the Act for provisional attachment of the plant, machinery, vehicles and stock of the company on the ground that input tax credit was availed by the company by showing fake purchases from bogus/suspicious entities. 2.2 The search was conducted during the period from 20.07.2022 to 28.07.2022, and on 28.07.2022, the applicant came to be arrested by issuing arrest memorandum by the State Tax Officer, Enforcement Division, Rajkot, for the offence punishable under section 132(1)(c) of the CGST and GST Act, alleging that input tax credit of Rs.10.71 crores in respect of fictitious transactions amounting to Rs.59.55 crores was availed by him. 3. Ms. Megha Jani along with Mr. Dilip T.Mamtora and Mr. Meet D.Pansuria, learned advocates for the applicant submitted that, the allegations against the present applicant are of entering fake invoices into the data provided to the department; however, the alleged invoices provides transportation detail whereby the goods were supplied and deli....
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....s.6,17,21,463/-; and further the applicant has made payment of Rs.50 Lakhs on July, 2022. Ms. Jani stated that complaint has been filed on 22.09.2022 alleging that the applicant is availing Input Tax Credit using invoice and bills without any supply of goods or services or fraudulently has availed the Input Tax Credit without any invoice or bills. 3.6 Ms. Jani submitted that the witness list does not suggests any of the transporters nor any transporter has been made accused in the matter and as per the witness list, the only four witnesses are from the department. According to Ms. Jani, had there been any suspicion transaction and communication with Angadiya Pedi, then they ought to have been made witness in the complaint. 3.7 Reliance has been placed by Ms. Jani on the judgment of Arnesh Kumar Vs. State of Bihar & Anr., reported in 2014 (8) SCC 273, and P. Chidambaram v. Directorate of Enforcement, reported in (2020) 13 SCC 791. 4. Mr. Pranav Trivedi, learned Additional Public Prosecutor submitted that, the applicant in his statement stated that he is managing all the purchase transactions, and he is the main person indulged in the activity of showing fake purchase transa....
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....per basis. Mr. Pranav Trivedi, submitted that in the year 2020-21 the firm was shown to be the manufacturer of brass while in 2021, the trading is of scrap. 5. Heard learned advocates on both the sides and perused the material on record. In the impugned arrest memo, the allegation against the applicant is of committing offence under section 132(1)(c) of the GGST Act & CGST Act. Section 132 of the GGST Act is pari materia to the provisions under the CGST Act. It relates to "Punishment for certain offences". For ready reference, section 132(1) is reproduced hereunder; "Section 132.(1) - Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offence, namely :- (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax; (c) avails input tax credit using the invo....
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....ny other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine; (iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both." 5.1 In P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791, the Apex Court held as under: "22. The learned senior counsel for the appellant has also placed reliance on the decision in Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with specific reference to paragraph 39, which reads as hereunder: "39. Coming back to the facts of the present case, both the courts have refused the request for grant of bail on two grounds: the primary ground is that the offence alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer; the secondary ground is ....
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....deration 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 economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial." 5.2 The Hon'ble Supreme Court in case of Sanjay Chandra Vs. CBI, [2012 1 SCC 40], has referred the case of State of Kerala Vs. Raneef, [(2011) 1 SCC 784], to observe that in deciding the bail applications an important factor which should certainly be taken into consideration by the court is the delay in concluding the trial. Here, taking in....
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.... since the department already had sufficient time to investigate their claim and to gather evidence, which they have alleged are in connection with fraudulent claim of Input Tax Credit and alleged evasion. 5.7 The department has already attached the property under section 83 which is valued as Rs.6,17,21,463/-. Further the amount of Rs.50 Lakhs has been paid by the applicant and if necessary under sub- section (1) of section 138 of the Act, the Commissioner would have all the authority to compound the offence on payment being made by the alleged accused. The details of all the fake companies have been recorded. 138 transactions have been found to be suspicious and against that the applicant claims the said to be actual transfer against the payment by RTGS. Both the sides would get an opportunity to prove their case. Further custody of the applicant does not appear to be necessary, since the department, if provided by law, can go on with the further investigation and produce necessary documents in support of their case, as sufficient time for the investigation was taken prior to filing of the complaint by the department. 6. Hence, considering the facts and circumstances of the....