TaxTMI 
TaxTMI 
2026 (4) TMI 1503
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 132 of Central Goods and Services Tax Act, 2017 in MCRCA No. 368 of 2026. 2. Case of the prosecution, in MCRCA No. 353 of 2026 is that M/s Shrishti Construction, a proprietor firm engaged in trading of goods, has wrongly availed Input Tax Credit (for short, ITC) without receiving actual goods and thereafter passed on the same to several down chain units without supplying any actual goods. While initiating the investigation, no firm by the name of M/s Shrishti Construction, Devpuri, Raipur was operating or working at the principal place of business declared by the inspection or no business activities were found. When contacted on the mobile number provided in the GST registration, Premdas Pannika identified himself as the proprietor of M/s Shristi Construction. In his statement under Section 70 of the CGST Act, he stated that he had met with Rohan Tanna (applicant in MCRCA No. 353/2026) in connection with his business. He promised to assist him in his business. He provided him with the firm's GST ID and password for further business operations, promising him a 0.5% commission. All business activities within his firm, including purchases and sales, filing GST returns, were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s recorded by the department, all of which are already in the custody of the prosecution. No recovery is to be effected from the physical custody of the applicant, rendering custodial interrogation wholly unnecessary. Even where offences under Section 132 of the CGST Act are alleged, arrest is not mandatory and must satisfy the test of necessity. In the present case, no exceptional circumstances exist warranting the arrest of the Applicant. The offences alleged under Sections 132(1)(b), 132(1)(c) and 132(1)(f) of the CGST Act are statutorily compoundable under Section 138 of the Act, reflecting the legislative intent that such matters are primarily fiscal and revenue-oriented, and not punitive in nature. No incriminating material whatsoever has been seized from the possession, custody, or premises of the applicant during the course of investigation. The absence of any recovery linking the applicant to the alleged offence clearly demonstrates that his custodial interrogation is unwarranted and that continued detention would serve no useful purpose. The offences alleged against the Applicant under Section 35 read with Sections 132(1)(b), 132(1)(c) and 132(1)(f) of the CGST Act, 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....09.2024, the non-applicant conducted an inspection and visited the declared principal place of business of M/s Shristi Construction. During the course of the said proceedings, it was alleged by the non-applicant that Mr. Chandan Gupta was engaged in providing purported bogus invoices for the alleged availment of ITC. On 27.02.2025, the nonapplicant recorded the statement of Mr. Chandan Gupta, wherein it was alleged that the applicant's name was disclosed in connection with the purported issuance of bogus invoices through applicant-Rohan Tanna. It is further submitted that the statement of Rohan Tanna was also recorded by the non-applicant on 10.03.2025. The non-applicant issued summons dated 11.03.2025 and 13.06.2025 to the applicant. However, due to bona fide exigencies beyond the control of the applicant, he could not appear on the said dates. Thereafter, the nonapplicant issued a subsequent summons dated 04.07.2025 directing the applicant to appear on 28.07.2025, which was duly complied with. Pursuant thereto, the applicant appeared before the non-applicant on 28.07.2025, and his statement was recorded. The aforesaid sequence of events unequivocally demonstrates that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are being conducted by the GST Intelligence and that an FIR under the general criminal law has not yet been registered does not, in any manner, oust the remedy of anticipatory bail, as long as the threat of arrest is imminent and real. Reliance in this regard is placed upon Sushila Aggarwal vs State (NCT of Delhi) & Anr., (2020) 5 SCC 1. The offences alleged by the non-applicant fall under Section 132 of the CGST Act, which, at its highest, prescribes a maximum punishment of five years or fine, or both. Thus, even taking the allegations at face value and without admitting them, the offences cannot be categorized as heinous or grave in the sense that custodial detention becomes indispensable. Section 132 is part of a fiscal statute, revenue object being protection and recovery, not punitive incarceration. The provision itself clearly places the offences in a category below those involving life imprisonment or offences against the person and society. Therefore. the allegations, even if assumed for argument's sake, do not attract the kind of seriousness that justifies denial of anticipatory bail. The primary objective of the CGST Act is regulatory, facilitative, and revenue-orien....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ti Construction, Raipur have fraudulently availed ITC without actual receipt of goods and subsequently passed on such ITC to many down chain entities without any actual supply of goods. Verification of e-way bill on the GST portal confirmed that no inward vehicle movement was recorded on the e-way bill portal, clearly indicated the issuance of fake invoices without actual receipt of goods and thereafter passing on of same fraudulent ITC to many taxpayers, thereby causing substantial loss to Government exchequer. Acting upon the above intelligence, an investigation against the said firm was initiated under Section 67(1) of CGST Act, 2017 and an inspection was conducted on 13.09.2024 at the registered premises at: 1, Main Road, opposite Raj Electricals, Deopuri, Raipur, Chhattisgarh-492001. During the inspection no such firm in the name and style of M/s Shristi Construction, Raipur was found to be conducting any business from the said registered premises i.e. the firm was found to be non-functional/non-existent at the registered premises. After that the visiting officials contacted the registered mobile number of the firm mentioned in the GST registration, a person namely Premdas Pan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....H1Z3). Accordingly, a summon dated 17.01.2025 was issued to Chandan Gupta to appear on 23.01.2025. However, Chandan Gupta failed to appear on the scheduled date. Hence, another summon dated 31.01.2025 was issued to Chandan Gupta to appear on 05.02.2025. Chandan Gupta in compliance of summons dated 31.01.2025 appeared on date 27.02.2025 and his statement was recorded under Section 70 of CGST Act, 2017 on 27.02.2025, wherein Chandan Gupta categorically admitted that he had provided fake/bogus invoices of M/s. Shristi Construction, Raipur to many clients who further provided the said fake invoices to the final availers of fake/ineligible ITC. Chandan Gupta stated that he used to contact one Chandrashekar Chandrakar to procure the fake invoice of M/s. Shristi Construction, Raipur for further supply to his clients. As the name of Rohan Tanna came forward as Central figure in this scheme of ITC fraud case, a summon was issued to him, however, he failed to honour the summon dated 05.12.2025. 8. Mr. Sharma further submits that during the course of further investigation several summons were issued to Rohan Tanna. However, Rohan Tanna appeared only once against summon dated 03.10.2025. A ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvoices of M/s. Shristi Construction, Raipur and thereafter he used to contact Rohan Tanna to procure the same. He further stated that Shri. Rohan Tanna generated the fake invoices of M/s. Shristi Construction, Raipur and provided to him and he further provided the same to Chandan Gupta. Chandrashekar Chandrakar during his statement submitted the whatsapp chats along with its PDF exchanged between him and Rohan Tanna and Chandan Gupta. Perusal of the aforesaid Whatsapp chats clearly show that Chandrashekhar Chandrakar, Rohan Tanna and Chandan Gupta have exchanged regarding issuance of invoices of M/s Shristi Construction. E-invoicing ID and Password of M/s Shristi Construction, E-way bill ID and Password of M/s Shristi Construction, filing of GST returns of M/s Shristi Construction Thus, it unequivocally indicates that Chandrashekhar Chandrakar were hand in glove with Rohan Tanna and Chandan Gupta in generation and circulation of fake invoices of M/s Shristi Construction. Another statement of Premdas Panika was recorded on 11.08.2025 wherein he reaffirmed his earlier statement dated 13.09.2024. He further stated that upon noticing some highvalue transactions in the firm's ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in glove with Chandan Gupta in generation and circulation of fake invoices of M/s Shristi Construction and causing huge loss to the Government exchequer. WhatsApp chats submitted by them further corroborate the issuance of fake invoices by Chandrasekhar Chandrakar and Rohan Tanna and Rohan Tanna and Chandan Gupta wherein; fraudulent ITC of Rs. 17,18,23,354/- was availed without actual receipt of goods and fake ITC of Rs. 10,62,66,870/- was passed on without actual supply of goods across multiple states including Chhattisgarh, Maharashtra, Odisha, and Telangana. During the course of investigation one co-accused Chandan Gupta was arrested on 22.01.2026 under GST provisions and produced before the Hon'ble Chief Judicial Magistrate, Raipur and he was remanded in judicial custody Chandan Gupta is still in judicial custody. 9. Mr. Sharma further submits that the contention of the applicants that the offence is compoundable and economic in nature, the applicants have been critically engaged in generation and circulation of invoices without actual supply of goods and the offence of the applicant is covered under section 132(1)(b) of the CGST Act, 2017 Provisions related to compo....