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2019 (12) TMI 996 - HC - GSTGrant of Bail - Fake/Bogus Firm - fake input tax credit claim - CGST Act - offence under Section 132 Sub-Clause (b) and (c) of the Act - HELD THAT - Considering the contentions put forth by counsel for the Union of India, the bail cannot be granted - bail application rejected.
Issues: Bail application under Section 439 of Cr.P.C. for alleged offences under Section 132(1) of Central Goods and Services Tax Act, 2017.
Analysis: 1. The petitioner filed a bail application under Section 439 of Cr.P.C. regarding a case registered under Section 132(1) of the Central Goods and Services Tax Act, 2017. The petitioner claimed innocence, stating that he is the proprietor of one firm while another firm belonging to his brother was involved in the alleged offences. He argued that no revenue loss or fake input credit had been claimed by any of the firms under investigation. 2. The petitioner relied on the case of "G-Tech Industries vs. Union of India 2016(339) E.L.T. 209 (P & H)" where the Punjab and Haryana High Court held that statements recorded during inquiry/investigation may have been under compulsion and not voluntary. However, the Union of India vehemently opposed the bail application, alleging that the petitioner had created 26 fake firms and issued fake invoices amounting to ?494.16 Crores to claim input credit of ?108.36 Crores. The investigation revealed that the petitioner had user names and passwords for these firms and had obtained multiple PAN cards for them, although none of the firms were functional. 3. The Union of India further contended that the petitioner used individuals' data to create fake firms for claiming Input Tax Credit. Statements from the petitioner's accountant and brother supported these claims, stating that the petitioner was involved in the creation of fake firms under GST. After considering the arguments, the court decided not to grant bail based on the contentions raised by the Union of India. 4. The bail application was ultimately rejected by the court, emphasizing the seriousness of the allegations and the ongoing investigation stage of the case. The decision was based on the strong opposition from the Union of India regarding the petitioner's involvement in creating fake firms and issuing fake invoices to claim input credit, supported by statements from relevant individuals involved in the case.
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