AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 1074
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....r. (i). As per prosecution version in FIR/Case Crime No. 203/2023, dated 04.05.2023 under Sections 420, 467, 468, 471, 120-B 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. These have not been obtained with his consensus and he is totally unaware of the person who applied for these registrations and whose contact det....
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....l Misc. Bail Application Nos.44568 of 2024, 44584 of 2024 and 44571 of 2024 has summarised his arguments in the following manner: (i). The applicant is innocent and has been falsely implicated in the present case. Applicant is not named in the FIR. He further submits that name of applicant neither came into light in any statement of co-accused and in any re-statement of co-accused. The applicant has absolutely no nexus with the aforesaid alleged crime and no fake bills/invoices or fake firm has been created by the applicant. He further submits that one complaint was filed against the applicant in Gurugram, Haryana, under Section 132(1)(b), (c) and (1) of CGST Act, 2017 on 12.07.2023, in which the applicant was granted bail on 13.09.2023. In the present case, the Investigating Officer arrested the applicant on 20.03.2024 and one mobile phone has been recovered from the possession of the applicant. He further submits that applicant has no concern with the aforesaid mobile and the police in order to show good work has falsely implicated the applicant in the present case. (ii). Absolutely no incriminating material exists on record to prove that the applicant committed....
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....PAN Card was misused and on the basis of his PAN Card two Firms were registered. Thus, offence under the provisions of IPC stands committed. On the basis of these fake firms, a transaction is being done with the Company, of which Sanjay Dhingra is a Director. Each and every transaction is separate set, for this they have to submit separate return. Applicant has committed offence of separate nature, so GST Rules will not apply, but it will not take them out of the offence that has been committed under Indian Penal Code, 1860 (IPC). 4. Elaborating the points, learned Additional Advocate General has placed following arguments: A. He submits, insofar as involvement of the applicants in the offence is concerned, that they formed a syndicate and their modus operandi configures four segments: (i) assignment of job of collection of SIM Cards and personal data of people that have been uploaded on the portal of Goods & Services Tax; (ii) to use personal data for creation of fake firms by uploading it on GST Portal; (iii) there will be one actual firm which will be working and money transaction will flow to this actual firm and the input tax credit will be availed; and (iv) distri....
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....e person should be released, learned AAG contends that each economic offence has distinct parameter while consideration of bail, which can be summarized in three counts: (i) Gravity of Economic Offence, (ii) Impact, if the person is released on bail or the person is detained, and (iii) Interest of the Nation. It is argued that economic offence is not possible at the hands of one person and the present case is an organized crime where crores of government money has been siphoned by registration of fake firms in which all applicants are connected in one or the other way. H. With respect to consideration of bail in offences related to GST, learned AAG has placed reliance on various judgements of the Apex Court in the cases of Yogesh Jagish Kanodia v. State of Maharashtra and another, [(2021) 90 GSTR 402 : 2021 SCC OnLine Bom 154 : (2021) 2 Bom CR (Cri) 112] Ajay Khanna v. State Tax Anti Evasion Bureau, Jabalpur (M.P.) [(2020) 73 GSTR 296 2019 SCC OnLine MP 2130 : (2019) 30 GSTL 44], Rajesh Jindal v. Commissioner of Central Tax GST, Delhi (West) [2018 SCC OnLine Del 1344 : (2019) 21 GSTL 471], Jagdish Kanani v. Commissioner of CGST & Central Excise, Indore [2019 SCC OnLine MP ....
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....uments relating to fake GST firms. Copy of recovery memo was duly received by the accused persons putting their signatures thereon. The arrested accused persons, in their confessional statements, disclosed names of Anchit Goyal, Pradeep Goyal, Archit Goyal, Mayur alias Mani Nagpal, Charu Nagpal and Deepak Singhal. Consequently, Section 120B IPC was added. (iv) C.D. Parcha No. 11 shows supplementary statement of accused persons in judicial custody, who said to assist in recovery of incriminating articles from concerned place and persons. (v) C.D. Parcha No. 14 contains majid-statement of Yaseen Sheikh, Rajiv Jindal and Deepak Murjhani, who disclosed names of Rajiv Maheshwari and Rahul Gupta. In the same parcha the aforesaid accused persons including accused Ashwani Pandey, Vishal and Akash, all of them disclosed the complicity of Rajiv Maheshwari, Rahul Gupta, Gaurav Singhal and Gurmeet Singh Batra alias Sahil and confessed that they used to generate fake GST bills/ invoices in the names of registered fake firms on the basis of fake SIM and IDs. (vi) C.D. Parcha No. 15 shows that at the instance and pointing out of Deepak Murjhani, Ashwani Pandey and Yasee....
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....mes of Goldi, Anchit, Anshul, Pradeep Goyal, Praveen, Banti, Puneet, Ishwar, Vikas Dabbas and Sanjay Garg, Mayur alias Mani Nagpal, Charu Nagpal, Rohit Nagpal, Deepak Singhal, Peetam, Mintu, Montu, Ashish, Nandlal, Mahesh, Gaurav Nagpal and Sahil, and admitted to have been working together in this GST fake registrations and for earning undue monetary benefit. (xi) In C.D. Parcha No. 24 (29.06.2023) the Investigating Officer found that the fake mobile no. 8800966916, which has been used in registration of GST firms with PAN Number, mentioned in the FIR, was found to have been used in four different mobile sets bearing different IMEI Numbers, therefore, the CDR/CAF report reveals that one of the IMEI in which the aforesaid mobile number was used, it was recovered from the possession of accused Yaseen Sheikh on 01.06.2023 as mobile set Nokia 1423. CDR and CAF reports are enclosed in the parcha, making evident the complicity of accused Yaseen along with all other accused persons. (xii) Parcha No. 25 shows (11.07.2023) the Investigating Officer found that fake GST firm - Tam Traders mentioned in the FIR does not exist at given address of Maharashtra and the documents s....
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....tims, in whose names fake GST firms have been registered. (xxiii) C.D. Parcha No. 69 shows that IMEI Numbers of recovered mobile phones from accused persons were sent to respective companies, namely, AirTel, Jio, Vodafone Idea and on being run it was found that said mobiles with certain IMEI numbers were used in registration of a number of fake firms. They provided information that the mobile (IMEI) recovered from accused Yaseen Sheikh was used in 92 GST registration firms, from Vishal Singh and Akash Saini in 53 GST firms, from Atul Sengar in 45 GST firms, and mobile (IMEI) recovered from Deepak Murjhani was used in 139 fake GST firms. (xxiv) In C.D. Parcha No. 72 the Investigating Officer has referred the letter sent to DGGI (Director General of GST Intelligence), Unit Ghaziabad, in response thereto he had relied that total 2528 GSTIN fake firms were identified which are involved in ITC of Rupees Four Thousand Crore, in respect to the same different Zonal Units have arrested accused, namely, Tushar Gupta, Sanjay Dhingra, Rishabh Jain, Shubham Jindal, Tarun Jindal, A. Suresh Kumar, Sanjay Jindal and Ajay Sharma. (xxv) In C.D. Parcha No. 75 the Investigat....
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....d arrest of Ashish Allavadi along with the recovery of driving licence of accused Mannan Singhal and voter I.D. of Baldev. In his statement, Ashish stated that he used to bring payment of GST commissions and he has confessed the names of his cousin brother Amit alias Montu, Arjit, Anchit, Atul, Mannan, Baldev, Nandlal, Ajay, Ishwar, Sanjay Garg, Gaurav Singhal, Preetam alias Chacha and others in the commission of the offence. (xxxi) C.D. Parcha No. 82 shows the entry of bank account of accused persons wherein concerned GST ITC transaction was found, as such the accounts were requested to be ceased by the Bank under Section 102(1) Cr.P.C. (xxxii) In C.D. Parcha No. 84 the I.O. shows arrest of accused Praveen Kumar with the recovery of mobile phone, Debit Card of Atul Gupta and two tax invoices. In his confessional statement he admitted complicity in the offence with other accused persons including Rajiv Jindal. He further disclosed the fact that with regard to the fake invoices GST Department has initiated proceedings against the accused, in which penalty of Rs. 12 lacs was recovered from the company. (xxxiii) C.D. Parcha No. 85 shows that IMEI of the mobi....
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....e along with other persons, at the office of Arjit, Anchit and Pradeep Goyal, used to transfer the said GST firms bills to different places and receive commission thereof. Further, he disclosed the family of Archit and Anchit is mainly involved in this offence and all other accused are involved in different aspects of commission of crime. (xxxviii) C.D. Parcha No. 125 (09.03.2024) reveals that against the absconding accused (1) Anchit Goyal, (2) Pradeep Goyal, (3) Arjit Goyal, (4) Baldev alias Balli, (5) Rohit Nagpal proceedings of Non-Bailable Warrants, declaration under Sections 82 and 83 Cr.P.C. have been completed and lookout circular (LOC) has been issued as such there is less chances of arrest of the mentioned accused so charge sheet was filed against them under Sections 420, 467, 468, 471, 120-B IPC. Meaning thereby that accused have fled away from the proceedings of law, hence, shows their guilt. (xxxix) C.D. Parcha No. 126 (11.03.2024) shows that during the course of investigation accused Kunal Mehta was in judicial custody as such vide judicial permission the statement of accused Kunal Mehta alias Goldi was recorded in jail, wherein he stated to effect t....
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....s Radha Krishna Marketing about Rs. 16,35,00,000/- were transferred to her saving bank account. Copy of recovery memo was served upon the accused receiving their signatures thereon. (xlv) C.D. Parcha No.149 (03.05.2024) shows that mobile phones and tablet which were recovered from the daughter of Deepak Murjhani, namely, Dolsy Murjhani, were sent to Forensic Science Laboratory, Ghaziabad for examination. (xlvi) C.D. Parcha No. 156 (13.05.2024) reveals that the data relating to fake GST firms was shared with DGGI Unit, Jaipur, Rajasthan, wherein on 30.08.2023 names of Rishabh Jain, Shubham Jindal and Tarun Jindal came to light in the present offence. The report of DGGI indicates that the computerised data obtained discloses that aforesaid accused persons have received ITC benefits by way of forged GST firms by creating fake bills and invoices. (xlvii) C.D. Parcha No. 158 (19.05.2024) refers the arrest of accused Rishabh Jain and Tarun Jindal from House No. 105, Prashant Vihar, Rohini, Sector-14 and from their possession recovery of 2 mobile phones, 1 laptop and list of fake GST firms was made. In their confessional statement, said accused stated that they ....
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....ce 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. 8. The backbone of goods and services regime is Input Tax Credit. Under the GST regime, ITC follows supply chain not only intrastate but also interstate supply. 9. It has been established through investigation that crime has been committed by the accused persons by making fraudulent firm by using PAN Card and Aadhaar Card, Mobile Number for creating fake firms and through fake invoices, they breached supply chain of ITC and got benefit through fake gains which have been created by them. Thus, in so many words, the said case is started with registration of fake firms using PAN Card and Aadhaar Card of the informant for consequential benefits of claiming ITC. 10. The next finding in the case of recovery and use of fake PAN Cards has to be ....
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....e of the licence/ authorisation to issue PAN cards, would be highly detrimental not only to the interest." 12. Thus, the offence in the present case is affecting the interest of public at large. 13. I have considered the submissions advanced by learned counsel for the parties and perused the record. 14. Section 27 of the Indian Evidence Act, 1872 deals with the relevancy of information received from a person accused of any offence while in the custody of the police officer. The Section provides an exception to the general rule that confessions made to the police officers are inadmissible in evidence. From the aforesaid, the scope of Section 27 of the Act, 1872 is that it applies to any information given by the person accused of an offence, which leads to the discovery of a fact. The Section states that "so much information" given by the accused that distinctly relates to the fact discovered may be proved. The exception to rule of admissibility is that normally confessions made to a police officer or while in police custody are inadmissible under Sections 25 and 26 of the Indian Evidence Act, however, Section 27 allows for an exception where information received from the ac....
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.... GST firms were registered, Investigating Officer proceeded on the information as provided by a secret informer and arrested two accused who disclosed about the office where work of the firm was being done. On the aforesaid information of the arrested accused persons, the Investigating Officer reached the office premises, wherein he found other persons working for the firm of the arrested accused persons. Laptops, mobiles, SIM Cards, fake invoices were recovered, thus, discovering such fact which connected them with the main accused who had got registered the fake firms and the consequential forgery or theft of GST was found. Thus, that part of the discovery of fact is admissible as per Section 27 of the Act. 19. The principal of "bail is the rule, jail is the exception" is a fundamental concept in criminal law, where the criminal justice system recognizes the importance of personal liberty and the presumption of innocence until proven guilty. This principal emphasizes that an accused should ordinarily be granted bail unless there are compelling reasons to detain him in custody. But there are exceptions to the aforesaid principal. While, the general rule favours granting bail, t....
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....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." 22. The Apex Court in the case of Nimmagadda Prasad v. Central Bureau of Investigation, (2013) 7 SCC 466 has formulated some important factors to be taken into consideration while considering bail applications. Relevant paragraph of the said judgement are 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 simi....
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....oth the physical object as well as mental consciousness of the informant accused in relation thereto. The same has been stated in Paragraph Nos. 22 & 23 of the said judgement, which are thus: "22. However, we must clarify that Section 27 of the Evidence Act, as held in these judgments, does not lay down the principle that discovery of a fact is to be equated to the object produced or found. The discovery of the fact resulting in recovery of a physical object exhibits knowledge or mental awareness of the person accused of the offence as to the existence of the physical object at the particular place. Accordingly, discovery of a fact includes the object found, the place from which it was produced and the knowledge of the accused as to its existence. To this extent, therefore, factum of discovery combines both the physical object as well as the mental consciousness of the informant accused in relation thereto. In Mohmed Inayatullah v. State of Maharashtra [(1976) 1 SCC 828], elucidating on Section 27 of the Evidence Act, it has been held that the first condition imposed and necessary for bringing the section into operation is the discovery of a fact which should be a relevant....
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....f 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 accusations, the nature of evidence in support thereof, the severity of the 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, the larger interests of the public or State and similar other considerations. It has also to be kept in....
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....nt: "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. ..." 31. The Apex Court has, in the case of P. Chidambaram v. Directorate of Enforcement [(2020) 13 SCC 791 : (2020) 4 SCC (Cri) 646], held that precedent of another case alone will not be the basis for either grant or refusal of bail though it may have bearing on principle and the consideration will have to be on caseto- case basis on facts involved therein and securing the presence of the accused to stand trial. Paragraph-23 of the said judgement reads thus: "23. Thus, from cumulative perusal of the judgments cited on either side incl....