TaxTMI 
TaxTMI 
2025 (11) TMI 70
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....Electric Company and M/s Shiv Enterprises were involved in availing and passing of Input Tax Credit (ITC) on the strength of invoices issued by the suppliers, whose GST registrations had been cancelled suo-moto by the department, thereby rendering such ITC ineligible and fraudulent in nature. Moreso, M/s Shiv Enterprises had declared its Additional Place of Business at G.T. Road, Ludhiana which was the same address as Principal Place of Business of M/s New Vasan Electric Company. Even both the firms were found using the same mobile numbers for getting OTPs for filing GST returns. No genuine business activity was found to be carried out on the Principal Place of Business declared by M/s Shiv Enterprises, thereby indicating the possibility of a non-operational or paper entity. The overlap in declared business premises between the two entities raised serious concern about their independent functioning. It was also observed that major suppliers of both the above named firms were either found to be non-existent or untraceable during physical verification. A detailed examination of supplier chain of the major suppliers were undertaken and it was noted that in most cases, the trading chai....
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....against tax invoices and other documents and supplied goods to various dealers and manufacturers against due tax invoices. He had been availing ITC on account of tax paid to the suppliers of his firm and had been utizing the same to offset output tax liability of his firm. Bills against the invoices which are being questioned by the department, have been given to him. He has been arrested with a pre-determined notion. There are more than 50 other suppliers of the petitioners, who are active and are conducting their business in normal course. He is alleged to have availed fraudulent ITC of Rs.6.09 Crores. He had purchased goods bona fidely from firms M/s Shiv Enterprises and M/s New Vasan Electric Company by making through proper bank channels. The goods were accompanied by Eway bills invoices. Firm had reversed ITC amounting to Rs. 47,02,971/- on 02.07.2025 and he had also deposited an amount of Rs.10 lakhs. Even on 03.07.2025 i.e. the date of his arrest, he had reversed an amount of Rs. 48,50,000/-, thereby substantially reducing the alleged tax liability to an amount of less than Rs.5 Crores. The E-way bills generated by the suppliers and the impugned firm show that genuine trans....
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....al submissions made by both the parties have been heard and carefully considered, besides going through the material placed on record. 7. Before proceeding to decide the prayer made by the petitioner for grant of bail, it would be apt to have a look at the relevant statutory provision contained in Section 132 of CGST Act, which read as under : 132. Punishment for certain offences.- (1) Whoever commits any of the following offences, namely:- (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax; (c) avails input tax credit using such invoice or bill referred to in clause (b); shall be punishable-- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with i....
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....nd Shah v. Union of India [(2018) 11 SCC 1] going back to the days of the Magna Carta. In that decision, reference was made to Gurbaksh Singh Sibbia v. State of Punjab [(1980) 2 SCC 565] in which it is observed that it was held way back in Nagendra v. King- Emperor [AIR 1924 Cal 476] that bail is not to be withheld as a punishment. Reference was also made to Emperor v. Hutchinson [AIR 1931 All 356] wherein it was observed that grant of bail is the rule and refusal is the exception. The provision for bail is therefore age-old and the liberal interpretation to the provision for bail is almost a century old, going back to colonial days." 10. It will also be proper to refer to Sanjay Chandra vs. CBI, (2012) 1 SCC 40, wherein Sessions Court and the High Court had refused the requests of the persons accused of committing offences of cheating and forgery and use of forged documents, for grant of bail on the grounds that offences alleged against them were serious involving deep rooted planning, causing huge loss to the State exchequer and that there was possibility of the accused persons tampering with the evidence. The Hon'ble Supreme Court observed as under : "The grant or re....
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....prescribed for the offence the accused is alleged to have committed. While considering the prayer for grant of bail in any offence, including economic offences, it is not a rule that bail should be denied in every case where the allegation is one of grave economic offences since there is not such bar created in the relevant enactment passed by the Legislature nor does the jurisprudence provide so. The broad parameters to be considered while deciding prayer of an accused for grant of bail can be enumerated as under : (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 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. 13. Reference may now be made to the citations relied upon by th....
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.... the accused by taking into consideration the fact that he was in custody for a period of 07 months, chargehseet had been filed and that the offence carried maximum punishment for 05 years of imprisonment. While granting bail to the accused, the Hon'ble Supreme Court had made following observations: "We are surprised to note that in a case like this, the appellant has been denied the benefit of bail at all levels, including the High Court and ultimately, he was forced to approach this Court. These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extra ordinary circumstances." 15. Similar observations were made by the co-ordinate Benches of this Court in Deepak Sharma's case (supra), Parteek Das Gupta's case (supra), Amit Bansal's case (supra), Tejpal Singh's case (supra) and Sunil Mahlawat's case (supra). 16. Now adverting to the present case, as per the allegations, the petitioner is involved in the racket of fake invoicing, thereby causing loss to the govt. exchequer through fraudulent GST input tax credit claims. However, the claims are yet to be determined by the competent authority of the respondent....