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2020 (1) TMI 1184 - HC - GSTBail Application - input tax credit - allegation that fake firms to whom input credit transferred - HELD THAT - The petitioner has created fake firms and has fraudulently transferred input tax to as many as 470 beneficiary parties. Out of which, fifty five parties took fraudulent input tax credit and have now reversed those entries - Also, petitioner avoided service of summons and was arrested from Ajmer. The second bail application cannot be allowed - bail application dismissed.
Issues: Second bail application under Section 439 of Cr.P.C.
The judgment pertains to a second bail application filed under Section 439 of the Criminal Procedure Code (Cr.P.C.). The petitioner is facing charges under Sections 132(1), (b), (c), (f), (g), (k), (i) of the Central Goods and Service Tax Act, 2017, read with Section 69 of the CGST Act, punishable under Section 132(1)(i) and (iv) of the CGST Act, along with Section 132(5) of the CGST Act. The key contention raised by the petitioner's counsel is the lack of evidence proving the creation of fake firms by the petitioner. The counsel argues that the department failed to interrogate the parties to whom alleged input tax credit was transferred. Additionally, it is argued that the offence is triable by a First Class Magistrate, and only two out of fourteen witnesses have had their statements recorded. The counsel representing the Union of India vehemently opposes the bail application, alleging that the petitioner established fake firms and fraudulently transferred input tax to 470 beneficiary parties. Among these parties, fifty-five reversed the fraudulent entries after availing input tax credit. The total loss to the exchequer is claimed to be Rs. Thirty-three crore, with Rs. Thirteen crore already recovered. Furthermore, it is asserted that the petitioner evaded summons and was eventually arrested in Ajmer. After considering the arguments presented, the judge, in this case, decides not to grant the second bail application, thereby dismissing it.
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