TaxTMI 
TaxTMI 
2024 (9) TMI 1226
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....uddh Nagar, and (iii) FIR/Case Crime No. 255 of 2023, dated 08.06.2003, under Sections 420, 467, 468, 471 & 120B IPC, Noida Sector-20, District Gautam Buddh Nagar. 2. As per prosecution version in FIR/Case Crime No. 203/2023, dated 04.05.2023 under Sections 420, 467, 468, 471 IPC, Police Station Noida Sector-20, Gautam Buddh Nagar, the informant Saurabh Dwivedi is a journalist and works as an Editor of the Lallantop internet news portal and India Today Hindi Magazine. He came across two GST registrations viz. 03AUSPD7067N1Z3 and 27AUSPD7067N1ZT obtained in the State of Punjab and Maharashtra respectively w.e.f. 20.03.2023. These have been applied on informant's PAN AUSPD7067N (Exhibit 1) and bear his name, Saurabh Dwivedi as legal name of the business entity. The details of both the registrations from GST portal are enclosed as Exhibit 2 to the complaint. The registered address mentioned for the given two registrations are as under - (a) 03AUSPD7067N1Z3 having registered address as 787, Ground Floor, Railway Office, ATI Road, Ludhiana, Punjab, 141008, (b) 27AUSPD7067N1ZT having registered address as 172, Sau Alakatal Uttamrao Nikalaje Path, Solapur, Solapur, Maharashtra, 413003.....
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....ase of Kanika Dhingra and Mayank Dhingra, submits that three first information reports have been lodged, for which investigation started and charge sheet was submitted against 8 accused persons on 29.08.2023. The applicants are neither named in the first information reports nor have been charge sheeted till 29.08.2023. 6. On 06.09.2023 CD Parcha No. 75 was forwarded, wherein the Investigating Officer has recorded that he has received information from DGGI Meerut, Zonal Unit, Ghaziabad regarding prosecution of Sanjay Dhingra conducted by DGGI, Meerut under the provisions of the GST Act, 2017. The Investigating Officer reduced into writing the complaint dated 04.08.2023 filed by DGGI, Meerut in the court of Special Chief Judicial Magistrate, Meerut bearing Case No. 1942 of 2023. In the said complaint it was alleged that M/s Good Health Industries Pvt. Ltd., the Company where husband of the applicant - Kanika Dhingra, works as a consultant, had transactions with M/s AKS Traders which in turn had transactions with M/s YOYO Traders. 7. Learned counsel for the applicants submits that the case-diary of Case Crime No. 203 of 2023 consists of 70 parchas, wherein investigation as condu....
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.... employees of M/s Good Health Pvt. Ltd., no such statement has come on behalf of the employees which suggests complicity of the applicants in the aforesaid case. The Investigating Officer further records that Rs. 16.35 crore have been transferred to Kanika Dhingra from M/s Radhey Krishna Marketing, which is the firm of son of Sanjay Dhingra. All transactions were through online mode i.e. bank to bank transactions and the amount has been returned / adjusted by the applicant as on 31.03.2024. 12. In CD Parcha No. 60, wherein statements of employees of M/s Good Health Pvt. Ltd., have been recorded, it has been alleged that Rs. 289.14 crores have been transferred from M/s Good Health Industries Pvt. Ltd. to M/s Radhey Krishna Marketing (firm of Mayank Dhingra). The aforesaid amount was paid by M/s Good Health to M/s Radhey Krishna Marketing against the supply of milk, which is an exempted item under GST, made by M/s Radhey Krishna Marketing which was in turn purchased by its own vendors. It is relevant to point out that payments made by applicant's (Mayank Dhingra's) firm to its vendors have already been demonstrated in the balance sheet annexed in bail application. 13. T....
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....as on date no charge sheet has been submitted in the matter of the applicant. Learned Senior Counsel further argued that allegation is against Good Health. As per allegations, there are two companies, namely, YOYO Traders and AKS Traders which are mentioned in the charge sheet, which have been formed by the accused persons who have been chargesheeted in the first charge sheet. Allegation is that from these traders, transactions were made to Good Health. Statements of employees show that M/s Good Health was controlled by Sanjay Dhingra. Perusal of record shows that some complaints have been filed against the applicant under GST Act. This allegation has already been investigated by GST Department. He has drawn attention of the court to bail order dated 03.08.2023 passed in the case of Sanjay Dhingra i.e. Criminal Misc. Bail Application No. 32951 of 2023, Sanjay Dhingra v. Union of India and another. 20. Insofar as transfer of money is concerned, money came from the company of applicant's son. Sanjay Dhingra's Company has 5000 vendors. Money was deposited in Mayank Dhingra's Company because milk was transacted by his Company. Transaction reveals that son gave money to his mother, w....
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....material as collected by the Investigating Officer including statements, as recorded, it is evident that it is a case where a number of SIM Cards have been utilized, therefore, it is a case where the entire family is involved and if the bail is granted to one person, it will perpetuate illegality. D. The FIR was lodged by one Saurabh Dwivedi, who is a journalist and Editor of The Lallantop Internet News Portal, about unknown GST registrations applied on his PAN showing the addresses of Punjab and Maharashtra. The said GST registrations have been obtained without consensus. It has also been alleged that two registrations are already authenticated for Aadhaar verification whereas as on date no email ID or mobile number is linked with the Aaadhaar. E. Learned Additional Advocate General submits that the informant finds his name as a business entity. There are already two registrations for which he has never applied and there are two different addresses which have been shown. The informant in the FIR has emphatically stated that he never applied for such registrations and there is no consensus on his part. It is also stated that similar registration has been applied i....
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....eau of Investigation [( 2013) 7 SCC 466], Serious Fraud Investigation Office v. Nittin ohari and another [( 2019) 9 SCC 165], and State of Gujarat v. Mohanlal Jitamalji Porwal and another [( 1987) 2 SCC 364]. 24. As argued by Mr. Amit Singh Chauhan, learned AGA-I and Sri Mayank Awasthi, learned Brief Holder, for the State, the following material has been collected to show the involvement of the applicants in the present case: (i) C.D. Parcha No. 2 bears details of Mobile No. 8800966916 which was used to register the GST firms mentioned in the FIR, its CDR (Call Details Report)/ CAF (Customer Acquisition Form) reports were obtained from Surveillance Cell. (ii) CDR/ CAF reports were received which reveal that accused's location is of Pitampura Delhi, said information forms part of C.D. Parcha No. 4, whereafter informer as per CD Parcha No. 5 disclosed the names of Deepak Murjhani and Yaseen Sheikh found to have been involved in the crime. (iii) CD-Parcha No. 7 says that on the aforesaid information, police arrested Ashwani Pandey and Yaseen Sheikh along with the recovery of incriminating materials i.e. SIM Cards of different companies, laptops, Aadhaar C....
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....that the accused taken in police custody disclosed the names of Atul Gupta, Sumit Garg alias Sumit alias Chacha, Mannan Singhal, Baldev alias Balli, Ishwar, Praveen, Sanjay Garg, Banti, Archit Goyal. All of them confessed to prepare fake GST invoices against the names of fake firms at the office taken on rent by Deepak Murjhani and Archit Goyal. (viii) On being reached at the office of Jiwalo India Pvt. Ltd. (Shop No. 1-F/A-16, Gurudwara Road, Madhu Vihar, Delhi), statement of property owner, namely, Sahil Gupta S/o Sri Prakash Chandra Gupta was recorded, which revealed that the shop was taken on rent by one Rajnish Kumar Jha along with Raj Kumar Jha, for which a rent agreement was executed in the name of Jiwalo India Pvt. Ltd. The landlord identified the photograph of accused Yaseen Sheikh to be of Rajnish Kumar Jha, which shows the accused impersonated himself to be Rajnish Kumar Jha, thus it is a connecting chain in the commission of present offence. The information forms the part of CD Parch No. 17 (12.06.2023). (ix) In C.D. Parcha No. 18 (13.06.2023) the Investigating Officer found that fake GST firm - Tam Enterprises mentioned in the FIR does not exist at gi....
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....ted. (xvi) In the C.D. Parcha No. 37 arrest of Preetam Garg alias Chacha is mentioned along with recovery of fake tax invoices, mobile, aadhaar and voter ID. In his statement, the accused Preetam Garg confessed that he along with his elder brother Sanjay Garg went to Rohini, New Delhi, where he was introduced with Gaurav Singhal, Pradeep, Atul, Mannan, Sumit, Vikas Dabas, Goldi and Nand Lal, at the office of Arjit and Anchit. (xvii) In the C.D. Parcha No. 39 the Investigating Officer recorded arrest of Jatin Murjhani alias Rohit and Dolsy Murjhani. In their confessional statements, both have stated to have part of the entire transaction by getting commission. (xviii)In the C.D. Parcha No. 44 the Investigating Officer recorded arrest of accused Nandlal alias Nandu father of co-accused Mahesh and recovery of tablet (notepad). They informed that said tablet and mobile belong to accused Deepak Murjhani and Dolsy Murjhani. During his confessional statement, he has stated that the mobile recovered was to be returned to Deepak Murjhani as it is used for the purposes of obtaining OTP in registration firms, as also used in collection of payment from the customers.....
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.... has transferred ITC to fake GST firm AKS Traders, from which it was transferred to M/s Good Health Industries Pvt. Ltd., and both YOYO Traders and AKS Traders were found to be registered on fake documents. A complete report of DGGI office containing 28 pages is enclosed along with the parcha. In the said report it has been found that YOYO Traders and AKS Traders are non-existing firms and mobile numbers have been provided which are used in the registration of fake firms. (xxvii) C.D. Parcha No. 77 shows that on physical verification Investigating Officer found that both firms, namely, YOYO Traders and AKS Traders are non-existent at the principle place of business. (xxviii) In C.D. Parcha No. 78, the Investigating Officer mentions that mobile number used in the registration of GST firm YOYO Traders i.e. 9873797648 was found to be used in mobile having IMEI No. 862625043825695, the said mobile was recovered at the initial stage from the accused Deepak Murjani. (xxix) C.D. Parcha No. 79 shows that I.O. verified about whereabouts of the company but found the company YOYO Traders non-existent, further it was revealed that at the office of M/s Good Health Ind....
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....236/- was misappropriated as a tax claim as such huge loss to the State Exchequer was caused. From Annexure No. 2 it is revealed that fake ITC claims of Rs. 8,57,60,146/- were fraudulently claimed from the fake GST firms. Further, Annexure-3 discloses that fake ITC of Rs. 226.45 crores were claimed in collusion with the accused Sanjay Jindal and Ajay Sharma. The report of DGGI is enclosed along with the said Parcha. (xxxv) C.D. Parcha No. 105 shows the arrest of accused Rahul Nigam, Piyush Kumar Gupta and Dilip Sharma. They confessed that they use to create fake GST firms and invoices for the accused persons Arjit Goyal alias Adarsh Goyal, Anchit, Pradeep, Vikas Dabas and told that they are somewhere outside but they create fake GST firms and fake invoices on the email i.d. of [email protected] which is still logged-in on his laptop, wherein many fake GST firms are uploaded. Whereafter, 2 boxes containing 40 stamps, 1 box with 2 bank passbooks and 19 various bank' cheque books, 1 box containing 17 smart mobile phones, 1 box with key-pad mobile phones, 1 box with 20 pendrives, 1 box with one POS machine, and 45 SIM Cards, 12 PAN Cards, 10 Aadhaar Cards and 29 Credit ....
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....recorded wherein they have confessed their complicity in the present offence and requested the court below for allowing the remand of the accused in the present case crime under Section 420, 467, 468, 471, 120B IPC. (xlii) In C.D. Parcha No. 135, a letter from DGGI Delhi Unit is submitted by the IO which reveals that the accused Tushar Mehta who was arrested by DGGI Delhi Unit, was involved in recipient of fraudulent ITC to the tune of Rs. 24 crores on the strength of purported invoices issued by the fake GST firm M/s MKJ Enterprises which is a part of Noida fake invoice syndicate. (xliii) In C.D. Parcha No. 139 (10.04.2024) shows that during investigation it was found that accused Tushar Gupta, who was arrested by DGGI, Delhi Unit amongst 8 persons and also involved in the registration of 2600 fake GST firms, is in jail, as such the statement of the accused persons were recorded wherein they have confessed their complicity in the present offence and requested the court below for allowing the remand of the accused in the present case crime under Section 420, 467, 468, 471 120B IPC. (xliv) C.D. Parcha No. 146 (01.05.2024) indicates that the accused Sanjay ....
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....ix) C.D. Parcha No. 162 (26.05.2024) reveals that a report from DGGI, Coimbatore which reveals that names of Smt. Suganya Prabhu and Sri Prabhuparam Shivam came to the light in the complicity of offence, showing huge amount was misappropriated through ITC. (l) C.D. Parcha No.167 (23.06.2024) details about the arrest of Smt. Suganya Prabhu, her confessional statement was recorded which discloses the complicity in the present case. (li) C.D. Parcha No.172 (27.06.2024) shows the arrest of accused Babar Khan and recovery of forged tax invoices and other incriminating material and thereafter confessional statement of the accused was recorded. 25. Learned counsel for the State submits that in relation to the accused person, namely, Sanjay Dhingra, Mayank Dhingra and Kanika Dhingra, chargesheet was submitted on 26.07.2024 under Sections 420, 467, 468, 471, 120-B IPC in respective case crime numbers. 26. Learned counsel for the State has argued that the complicity of accused Sanjay Dhingra along with applicants Mayank Dhingra and Kanika Dhingra was unravelled by complete chain of evidence and the name of firms AKS Traders and YOYO Traders were disclosed which were c....
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....ining wrong financial benefits along with other accused persons, and it has not been appropriately replied by the accused persons. 30. While assisting the Court, Mr. Rishi Kumar, learned Additional Chief Standing Counsel submits that the present case begins with lodging of FIR by Saurabh Dwivedi, wherein allegations for fake GST registration applied in his name with PAN No. AUSPD7067N by anonymous person and got two GST firms registered, thus, the entire case begins with fake GST registration using PAN Card and Aadhaar Card of the informant. During the investigation it was found that larger nexus works for having benefit of input tax credit. The offence has been committed in an organized and synchronized manner, wherein fake and bogus invoices have been created to cover the money trail and goods supply as well as money transactions are there with forged firms. Establishing the entire chain, the accused persons have been found connected with each other and in one or the other way they have been benefited by fake GST registration shown by using PAN Card and Aadhaar Card of the informant. 31. The backbone of goods and services regime is input tax credit. Under the GST regime, IT....
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.... and Ors. (By Bombay High Court in Interim Application (L) No. 564 of 2024 in Commercial Intellectual Property Rights Suit (L) No. 537 of 2024), wherein the Court has observed thus: "It cannot be in dispute that the PAN system is of paramount importance on a national scale due to its multifaceted impact on governance, taxation, and financial integrity, and it can be said to be the cornerstone of a robust financial economic system. PAN related services are pivotal in fostering fiscal discipline and ensuring a transparent and accountable economic framework, as apart from being a unique identifier for individuals and entitles, it also aim at streamlining the tax recovery and payment process. Government of India has made it mandatory for PAN card holders to link the same to Aadhar Card, which is an acceptable proof of identification in India, and therefore, any potential misuse of the licence/ authorisation to issue PAN cards, would be highly detrimental not only to the interest." 35. Thus, the offence in the present case is affecting the interest of public at large. 36. I have considered the submissions advanced by learned counsel for the parties and perused the record.....
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.... and Aadhaar Card of the informant. 41. As regards the submissions regarding no credible evidence that the applicants have conspired, planned or plotted, in any manner, with Sanjay Dhingra or any of the fake firms, this Court has found from case diary, as placed above, that the SIM which has been used by accused Deepak Murjani in whose name M/s YOYO Traders is registered, and the same has been done with intention of achieving some gain, thus, it is an organized crime where the money trail is involved. 42. Money trail/ financial transaction and the records that have been traced to track the flow of funds, detect illegal activity which can be analyzed from the bank account of the applicants wherein it is not clear as to from where such huge amount of money came into accounts of the alleged accused persons and have been deposited in other accounts. The Investigating Officer has, while submitting the charge sheet, found unusual and unexplained transactions which indicate some illegal activity as showing involvement of the applicants in the criminal offence. 43. It is also clear that the illegal profits as made by the fake GST firms registered on the basis of PAN and Aadhaar Ca....
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....ney Laundering Act, 2002 (PMLA), lastly economic offence and white collar crimes. 49. The present case relates to economic offences. Such offence like large scale fraud, money laundering and corruption, are often viewed seriously because they affect the economic fabric of the society. The Courts may deny bail in such cases especially if the accused holds a position of influence or power. In the present case, money trail of crores, which affects the society at large scale, is involved which started from registration of fake firms by using Aadhaar and PAN Cards of the informant who had not applied for such registration. 50. The Apex Court in the case of Manish Sisodia v. Central Bureau of Investigation, 2023 SCC OnLine SC 1393, has discussed about the constitutional mandate which is higher law and accordingly it is the basic right of person charged of offence and not convicted be ensured and given a speedy trial, thus, where the trial is not proceeding for the reasons not attributed to the accused, the Court unless there are good reasons may well be guided by exercising power to grant bail. This would be true, the trial would take years. 51. As discussed while rejecting bail....
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....ken into consideration while considering bail applications. Relevant paragraph of the said judgement is quoted herein below: "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 itself 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." 54. Hon'ble Apex Court in the case of Directorate of Enforceme....
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....e and proper weight should be bestowed on these two factors apart from others. There cannot be an inexorable formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling bail." 59. The Apex Court in the case of Prahlad Singh Bhati v. NCT, Delhi and another [(2001) 4 SCC 280], has held that while granting bail, the court has to keep in mind nature of accusations, nature of evidence in support thereof, severity of punishment which conviction will entail, the character, behaviour, means and standing 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, larger interest of the public or State and similar other considerations. Relevant paragraph no. 8 of the said judgement is reproduced hereunder: "8. The jurisdiction to grant bail has to be exercised on the basis of well-settled principles having regard to the circumstances of each case and not in an arbitrary manner. While granting the bail, the court has to keep in mind the nature of....
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....c) Prima facie satisfaction of the court in support of the charge. (See Ram Govind Upadhyay v. Sudarshan Singh (2002) 3 SCC 598 : 2002 SCC (Cri) 688 and Puran v. Rambilas [(2001) 6 SCC 338 : 2001 SCC (Cri) 1124].)". 61. In the case of State of U.P. Through CBI v. Amarmani Tripathi [(2005) 8 SCC 21], the Supreme Court has formulated eight points for consideration of bail application. It would be apposite to quote the relevant paragraph no. 18 of the said judgement: "18. It is well settled that the matters to be considered in an application for bail are (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge; (iii) severity of the punishment in the event of conviction; (iv) danger of the accused absconding or fleeing, if released on bail; (v) character, behaviour, means, position and standing of the accused; (vi) likelihood of the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant of bail. ..." 62. The Apex Court has, in the case of P. Chidambaram v. Directorate of Enforc....