TaxTMI 
TaxTMI 
2024 (6) TMI 955
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....en registered against the Petitioners/A.2 to A.5 and others for the offences punishable under Sections 420, 409, 467, 471 of the Indian Penal Code, 1860 (for short, "I.P.C.") 3. I heard Sri B. Adinarayana Rao, learned Senior Counsel for the Petitioners and Smt. Y.L. Shivakalpana Reddy learned Standing Counsel-cum-Special Public Prosecutor for C.I.D., in all the petitions. 4. The Prosecution's case, as presented in the report dated 24.02.2024 and outlined in the counter-affidavits submitted on behalf of the respondent-State in four petitions, is as follows: i. Based on the report dated 24.02.2024 from the Deputy Director of the Andhra Pradesh State Directorate of Revenue Intelligence (A.P.S.D.R.I.) to Station House Officer, Machavaram Police Station in Vijayawada, a crime had been registered in Crime No. 63 of 2024. The report disclosed that Avexa Corporation Private Limited (A.C.P.L.), headquartered at Banjara Hills, Hyderabad, is involved in providing works contract services and is registered under the Goods and Services Tax (G.S.T) regime. ii. The A.P.S.D.R.I. office conducted a search operation under the provisions of Section 67 of the Andhra Pradesh Goods and Services....
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....L. had wrongfully availed and utilized an irregular Input Tax Credit (I.T.C.) amounting to Rs. 2,62,56,750/-. Consequently, this amount is subject to recovery under Section 74 of the C.G.S.T. Act. vi. Furthermore, M/s. Avexa Corporation Private Limited (A.C.P.L.) has also wrongly claimed Input Tax Credit (I.T.C.) amounting to Rs. 5,39,57,910/- without receiving corresponding goods or services. They are consequently liable for a penalty of Rs. 3,39,77,220/- as per Section 122 (1) (vii) of the C.G.S.T. Act, read in conjunction with Section 20 of the Integrated Goods and Services Tax (I.G.S.T.) Act, 2017. Additionally, M/s. A.C.P.L. has transferred irregular I.T.C. worth Rs. 8,04,63,898/- without providing goods or services. For this action, they are subject to a penalty of Rs. 3,57,43,817/- as per Section 122(1)(ii) of the C.G.S.T. Act. vii. The investigation conducted by the Directorate General of Goods and Services Tax Intelligence (D.G.G.I.), Hyderabad unit, unveiled that M/s. Avexa Corporation Private Limited (A.C.P.L.) solely received invoices and bills from four firms/companies, namely (1) M/s. Tanisha Infra Zone Pvt. Ltd. (2) M/s. Rollon Projects (3) M/s. Annai Infra Devel....
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....rported transactions allegedly occurred between 2017 and 2022; however, the Petitioners had already ceased associating with A.V.E.X.A. company in 2011 and 2015. Therefore, these allegations are fictitious and have been concocted with the malicious intent to prosecute the Petitioners unjustly. ii. Furthermore, it is contended that to establish the elements of Section 420 of the Indian Penal Code (I.P.C.), there must be dishonest inducement leading to the delivery of property to the accused through deceit, which is conspicuously lacking in the current matter. The authorities responsible for entrusting the work expressed contentment with the work performed by the principal contractor, B.S.R.I.I.P.L. Notably, B.S.R.I.I.P.L. did not raise any grievances of deceit or cheating against A.V.E.X.A. iii. Furthermore, it is argued that to fulfil the requirements outlined in Section 409 of the Indian Penal Code (I.P.C.), the accused must belong to specific professions such as public servant, banker, merchant, factor, broker, attorney, or agent. Therefore, as the Petitioners do not belong to any of the categories as mentioned above, they do not meet the criteria set forth under Section 409 o....
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.... Assembly Constituency in the 2024 General Election. Additionally, he holds the responsibility assigned by the party as the Zonal Incharge for East and West Godavari Districts. He coordinates the leadership and cadre throughout these districts for the forthcoming General Elections. There is a concern regarding the potential arrest of the Petitioners under the pretext of being former directors of the mentioned company. 7. The case of the Petitioners in Crl. P. No. 1539 of 2024, in brief, is that: i. The offences outlined in the G.S.T. Act address the use of false, forged, or fake documents and the offence of abetment, with specific provisions and corresponding punishments. Consequently, it is contended that the police lack jurisdiction to register an F.I.R. under Chapter XVII of the I.P.C. provisions, which stipulate punishments exceeding those prescribed under the G.S.T. Act. ii. The Petitioner is a well-established company engaged in construction activities and has undertaken government projects across multiple states. At no point in its operations has the Petitioner been associated with irregularities or offences. Specifically, the Petitioner contracted work from M/s.Avexa c....
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....j) Frivolity in Prosecution should always be considered, and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the Prosecution, in the normal course of events, the accused is entitled to an order of bail," 10. In Shri Gurbaksh Singh Sibbia and Others V. State of Punjab (1980) 2 Supreme Court Cases 565, the Hon'ble Apex Court held that "The question whether to grant bail or not depends for its answers upon a variety of circumstances, the cumulative effect of which must enter into the judicial verdict". 11. In Siddharam Satlingappa Mhetre V. State of Maharashtra (2011) 1 SCC 694. The Hon'ble Apex Court laid down certain factors and parameters to consider while dealing with anticipatory bail. It further held as follows: 113. Arrest should be the last option, and it should be restricted to those exceptional cases where arresting the accused is imperative based on the facts and circumstances of that case. The Court must carefully examine the entire available record, particularly the allegations directly attributed to the accused, corroborated by other material ....
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....e reported to have occurred between 2017 and 2022 with the collective conscience of all the Directors of the accused company being a company colluded with several other companies to deal with infrastructure, handling important projects, and dealing with Government functionaries, breached the trust reposed on it and committed criminal breach of trust and caused huge loss to the state exchequer. 17. The learned counsel for the Petitioners/A.2 and A.3 in Crl. M.P. No. 1449 of 2024 contends that the allegations outlined in the written complaint are vague, omnibus, false, uncontroverted and absurd and are only created to implicate the Petitioners as a result of political motives. They do not reveal any offence by the Petitioners. The essential elements required under Section 420 of IPC are not present in the current case. They argue that no deceitful inducement prompted the delivery of property to the accused parties, a crucial aspect for the application of this section. Additionally, they assert that the complaint lacks any indication of breach of trust necessary to invoke Section 409 of IPC, as there was no formal entrustment of property to the Petitioners. Furthermore, the Petitione....
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.... Petitioners (in Crl. P. No. 1539 of 2024) initiated legal action by filing Writ Petition No. 5660 of 2024 before this Court. Their petition sought a declaration that the actions of the Respondents, involving interference with the Petitioners' office, threats to seal the premises, and removal of staff without adhering to due process of law, were unlawful and arbitrary. During the proceedings, the learned Government Pleader for Home representing the Respondents in the Writ Petition presented arguments indicating a complaint lodged concerning G.S.T. affairs, which prompted an investigation by the concerned police authorities. As a result, the premises of the Petitioner Company were subject to search as part of the ongoing inquiry. Subsequently, the Court disposed of the Writ Petition at the admission stage, issuing directives to the Respondents; specifically, they were instructed not to interfere with the Petitioners' office or their employees without adhering to due process of law. 22. The Petitioners (in Crl. P. No. 1539 of 2024) argue that the remand report of A.1 includes an allegation suggesting collusion between the first Petitioner's company and M/s. Avexa. They c....
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....l contractor and as per the investigation, M/s. Avexa has transferred funds to fake entities outside the state of Andhra Pradesh, and Avexa only received inward bills/invoices without receipt of Goods/Services from them. 27. It is not in dispute that Avexa has received a work order regarding the construction of roads and utilities in the green buffer of N6 road in Amaravati Capital City from M/s. Jakson Eminence for values of Rs. 19,49,94,000/- and Rs. 35,85,95,506/- dated 28.02.2019, the above-said work was claimed to have been sub-contracted by Avexa to M/s. Tanisha Infra XZone Private Limited, M/s. Rollon Projects, M/s. Annai Infra Developers Limited and M/s. Allways Town Planners Private Limited. 28. The learned Special Public Prosecutor further contends that Avexa had diverted substantial public money, i.e., Rs. 17,85,61,864/- from the M/s. Aditya Enterprises, M/s. Sanjay Kumar Bhatia, M/s. Tanishq Steels Limited and M/s. Mount Business Build Private Limited: several sub-contracts were entered into without the permission of Amaravati Development Corporation Limited (A.D.C.L.), a Government body; the subcontract between B.S.R. and Avexa does not have prior approval of the aut....
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....y a person under this Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any negligence on the part of, any director, manager, secretary or another officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. (3) Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-s....
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.... the individuals named as accused in the F.I.R. Nevertheless, they assert that no prima facie material has been presented to implicate them in the company's affairs during the period of alleged fraudulent activities from 2017 to 2022. 35. The status of the first Petitioner (in Crl. M.P. No. 1489 of 2024), a former cabinet Minister aged 66, who intends to contest in the upcoming elections for the Chilakaluripeta Assembly constituency, remains uncontested. 36. According to the Prosecution's case, the alleged fraudulent activities occurred between 2017 and 2022 with the collective awareness of all directors of the accused company. In Crl. P. No. 1448 of 2024, the Petitioners, A.4 and A.5, assert that they were previously directors of Avexa Corporation Pvt. Ltd. (formerly known as M/s Siva Swathi Constructions Pvt. Ltd.) and exited from the company in 2011 and 2015, respectively. This fact remains undisputed, as no prima facie material has been presented to challenge it. The contention of the Petitioners in Crl. P. No. 1448 of 2024 is that they harbor genuine concerns regarding potential arrest on the pretext of being former directors of Avexa Corporation Pvt. Ltd. This appre....
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....1), the central allegation of diversion of public funds by M/s. Avexa Corporation Private Limited, Vizianagaram, A.P., to the extent of Rs. 45.37 Crores, is resorting to inward and outward bill trading. After having examined all the available records with A.D.C.L. (Amaravati Development Corporation, Vijayawada), it is concluded that there is no agreement between A.D.C.L. and M/s. Avexa Corporation Private Limited, the total mobilization advance was paid to M/s. B.S.R.I.I.L. is Rs. 20.80 crores. The total bill amount paid to the Principal Contractor, i.e., M/s. B.S.R.I.I.L. is Rs.118.82 crores, and the G.S.T. Component Paid & released to the Principal contractor is Rs. 5,18,10,138/-. Hence, the allegation has not been substantiated per A.D.C.L.'s available records. 41. It is also observed in the report that after verifying all the existing records available with A.D.C.L., the payment was released to the extent of work done after following the due procedure of the Department and per the terms and conditions of the agreement and after due certification by P.M.C. M/s. L.E.A. Associates South Asia Private Limited, at every stage, as mentioned in Para No. 6(A), to ensure that the re....
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....ration Limited with the B.S.R. Infratech Limited and M/s. Megha Engineering and Infrastructure Limited, reveals that the A.D.C.L. effected payments only after following the due procedure, obtaining the P.M.C. certifications at every stage and ensuring the quality of works as per the agreement conditions. Therefore, the primary accusation against the accused is their purported creation of counterfeit invoices to siphon public funds. The respondent/state does not contend that funds were withdrawn without fulfilling the requisite standards for project completion. 47. According to Section 6 of the A.P.G.S.T. Act, particularly Section 6 (b), if a proper officer acting under the Central Goods and Services Tax Act, 2017 has already initiated proceedings concerning a specific subject matter, no additional proceedings on the same subject matter shall be undertaken by the proper officer under the A.P.G.S.T. Act. 48. Section 132 (1) (b) of the G.S.T. Act states that issuing invoices or bills without actual supply of goods or services, thereby violating the Act or its rules, leading to incorrect availment or utilization of input tax credit or tax refund, is deemed an offence under the Act. ....