TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 343
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.... GST, Rourkela, are that on the basis of confidential information of involvement of Directors as well as Ex-Directors of three companies namely, M/S. Sairam Ingot Private Limited, M/S. Swastik Ingot Private Limited and M/S. Sunayana Metal Industries Limited and others for wrongfully claiming, utilizing and passing bogus input tax credit on the strength of forged documents purportedly issued in the name of non-existent and ghost business entities created and operated by them, without physical receipt and supply of goods, the local Authorities under GST Act started investigation, in the course of which, the petitioners Dhanman Shaw, Ram Bharose Shaw, Niku Singh and others were found to have committed the offences U/Ss. 132(1)(b)(c)(f) & (l) of the OGST Act for individually as well as jointly and severally in collusion with each other by issuing invoices or bills without physical supply of goods or services leading to wrongful availment or utilization of input tax credit by using such invoices or bills or fraudulently availing input tax credit without any invoices or bills and falsification of financial records including books of account and thereby, the petitioners and others have wr....
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.... from different registered and un-registered tax payers without obtaining purchase invoices from them and without payment of tax and he by arranging forged invoices from non-existing and dummy firms availed bogus input tax credit worth Rs.96.26 crores on the strength of fake invoices and defrauded the State Exchequer and similarly, petitioner-Ram Bharose Shaw by allegedly creating and operating 17 numbers of non-existent and ghost business entities has secured bogus input tax credit worth Rs.78.87 crores on the strength of fake invoices and thereby, defrauded the State Exchequer and petitioner-Niku Singh allegedly by creating and operating 10 numbers of non-existent and ghost business entities could manage to avail bogus input tax credit worth Rs.49.09 crores and defrauded the State Exchequer. It is also alleged in the prosecution report that petitioner Dhanwan Shaw, Ram Bharose Shaw and along with others have managed to secure bogus input tax credit of Rs.212.88 crores, whereas petitioner Niku Singh in collusion with others could manage to get bogus input tax credit of Rs.105.77 crores and all the three petitioners and another were accordingly arrested on 06.07.2022 and produced b....
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....ers. It is further submitted that the offence alleged against the petitioners are triable by Magistrate First Class and prescribes punishment up to five years, but the petitioners having detained in custody for more than seven months, no further detention would be useful in view of the fact that the prosecution has already submitted PR basing upon which, cognizance has been taken and there is hardly any chance of tampering of prosecution evidence by the petitioners. It is further submitted that the petitioners have cooperated the Authorities in the course of investigation and thereby, all the three petitioners are entitled to bail on that score. Mr.B.Mansinga by relying upon the decision in Smruti Ranjan Mohanty Vrs. State of Odisha; 2022 SCC OnLine Ori 743 prays to grant bail to the petitioners on any stringent conditions. 5. Mr. Sunil Mishra, learned counsel for the CT & GST has submitted that the petitioners are not merely fraudsters, but are accused of committing economic offence upon the State by defrauding approximately an amount of Rs.316.33 crores, out of which the illgotten share of petitioner-Niku Singh is Rs.105 crores and the rest amount is the ill-gotten share of Dhan....
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....has to be considered in the facts and circumstance of each case. While considering bail application, amongst other factors, the severity and magnitude of allegation has to be taken into consideration. On coming back to the materials placed on record, it appears that the authority under GST after making a detailed investigation has submitted prosecution report against the petitioners for commission of offences U/Ss. 132(1)(b)(c)(f) & (l) of the OGST Act which are punishable U/S. 132(1)(a to l)(i) of OGST Act, 2017 in this case. 7. In the course of hearing of bail applications, learned counsel for CT & GST, Orissa has produced the prosecution report in which the manner and circumstance of evasion of tax in the form of bogus input tax credit amounting to little more than Rs.316 crores has been alleged against the petitioners and the manner of commission of such tax evasion has been minutely described. In such prosecution report it is alleged against the petitioner Niku Singh that he being one of the associate of petitioner Dhanman Shaw was involved in creation and operation of ten numbers of fictitious and non-existent business entities and has issued fake invoices in the name of suc....
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.... name of fictitious firms created and operated by him. It, therefore, appears that there is prima facie allegations against these three petitioners and other for operating numbers of fictitious and ghost business entities for fake transaction with existing companies as well as non-existing company and by means of fake invoices, allegedly availed crores of input tax credit without physical purchase and supply of goods, which according to the GST Department has resulted fraud upon the State Exchequer to the tune of Rs.316 crores and some odd which is a serious allegation against these petitioners for commission of economic offences. 8. Albeit, the petitioners have relied upon the decisions of this Court in Ajaj Ahamad, Rohit Berlia, Pramod Kumar Sahoo and Smruti Ranjan Mohanty (supra), but the magnitude of allegation of tax evasion in each case therein appears to be small as compared to the amount alleged in the present case to the tune of little more than Rs.316 crores and therefore, in the peculiar facts and circumstance together with the manner of alleged commission of economic offence involving huge amount of tax evasion leveled against the petitioners makes the present case qui....
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....State and other similar considerations." 8.3 In Nimmagadda Prasad (supra), the Apex court at Paragraph-24 has held as under:- "24. 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. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt." 9. It is true that the petitioners are in custody for little more than seve....