AI Drafter 
TaxTMI 
TaxTMI 
2023 (10) TMI 411
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....d by the Inspector, CGST and and CX - Respondent No. 2, pursuant to the authorization granted by the Commissioner of CGST, under Section 69 of the Central Goods and Services Tax Act, 1971 (the CGST Act, 2017), for the alleged offence punishable under Sections 132(1)(b) and (c) read with clause (i) of the CGST Act, 2017. 2. The Applicant No. 1 is a proprietress of M/s. Shreenathji Enterprises. The Applicant No. 2 is the husband of Applicant No. 1. M/s. Shreenathji Enterprises, the applicants claim, is engaged in the business of trading alloy, steels and scrap etc. 3. A Summons under Section 70 of the CGST Act, 2017 was served on M/s. Shreenathji Enterprises on 6 April 2022. It was alleged that the applicants had availed input tax credi....
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....a, that pursuant to the order dated 7 December 2022, the applicants had appeared before the Investigating Officer, their statements were recorded and the applicants had also paid an amount of Rs. 88 Lakhs partly in cash and partly in reverse credit. 8. I have heard Mr. Raichandani, learned Counsel for the Applicants and Mr. Mishra, learned Special PP for Respondent Nos. 1 and 2. 9. Mr. Raichandani, learned Counsel for the Applicants made an endeavour to take the Court through the developments in the investigation of the instant matter. It was urged that the applicants have co-operated with the investigation to the fullest and as many as seven statements of the applicant No. 1 have been recorded. The Applicants have also paid the subst....
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.... in unearthing fraud in availing wrongful Input Tax Credit for a huge amount. 12. Mr. Mishra would urge that the quantum of the Input Tax Credit wrongfully availed on the basis of the invoices only without any supply of the goods is huge. Loss to the state exchequor is in the range of Rs. 9 to 10 Crores. It was submitted that economic offences constitute a class in themselves. The custodial interrogation is indispensable in such matters. To lend support to this submission, Mr. Mishra placed reliance on the orders passed by this Court rejecting the applications for pre-arrest bail in the cases of Dev Adania V/s. State of Maharashtra ABA No. 2030 of 2021 dt. 23 September 2021.; Suresh Hukmat Rai Jadhwani V/s. Union of India and Anr. ABA 65....
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....ely with effect from 26 November 2020. 17. By an order dated 11 September 2023, this Court quashed and set aside the Show Cause Notice dated 27 July 2022 as well as consequential order dated 11 November 2022 of cancellation of registration. 18. From the perusal of the aforesaid order, it becomes evident the show cause notice and the order impugned therein were cancelled on account of failure to follow the principles of natural justice and non-application of mind. The Division Bench had averted to the serious lapses on the part of the concerned officer in issuing the show cause notice and passing the order of cancellation of registration. 19. What is of significance, for the determination of this application, is the fact that the sa....
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.... applicants. 22. Secondly, the applicants have appeared before the Investigating Officer, as directed. As many as seven statements of the applicant No. 1 have been recorded. Relevant documents appear to have been collected. It cannot be, thus, urged that the applicants have not co-operated with the investigation. 23. As the applicants have been protected since December 2022 and the sustainability of allegation of wrongful availment of Input Tax credit in respect of a major component (Rs. 7.74 Crores) become debatable, at this length of time, I do not find that the custodial interrogation of the applicants is warranted for further investigation. 24. The applicants also appears to have roots in society. The possibility of fleeing awa....