2020 (1) TMI 92 - HC - GST

Evasion of GST tax liability - Prayer for not to arrest - final adjudication of tax liability has not been made as yet - petitioner submits that they have deposited a sum of ₹ 3.25 crores with the tax authorities and also undertakes to deposit an additional sum of ₹ 3 crores within seven days from date - HELD THAT - Matter will appear for further hearing one week after vacation. In the event, petitioner deposit a sum of ₹ 3 crores as undertaken and co-operates with investigation in accordance with law and meets investigating officer once in a week and deposits his passport with the said officer, petitioner shall not be arrested in connection with this case for a period of two weeks after vacation or until further orders, whichever is earlier.

Summary

Issues: Tax liability adjudication, deposition of funds, cooperation with investigation, arrest prevention

Tax Liability Adjudication:
The petitioner claims that the final adjudication of tax liability has not been completed yet. They have already deposited a sum of ?3.25 crores with the tax authorities. On the other hand, the department's lawyer alleges that the petitioner avoided paying GST by using forged and fabricated invoices, resulting in an outstanding liability of ?16 crores. The petitioner admits to depositing ?2.75 crores towards GST dues. The petitioner agrees to deposit an additional ?3 crores within seven days.

Deposition of Funds:
The petitioner undertakes to deposit an extra ?3 crores within a week as agreed. The court specifies that if the petitioner fulfills this commitment and cooperates with the investigation by meeting the investigating officer weekly, depositing their passport with the officer, and abiding by the law, they will not be arrested for two weeks after vacation or until further orders.

Cooperation with Investigation:
The department accuses the petitioner of non-cooperation with the investigation. To avoid arrest, the petitioner must cooperate with the investigating officer, deposit the additional funds as promised, and follow the legal procedures. The court emphasizes the importance of the petitioner's cooperation in the investigation process.

Arrest Prevention:
To prevent the petitioner's arrest in connection with the case, the court sets conditions that include the timely deposition of the additional sum, cooperation with the investigation, and regular meetings with the investigating officer. The court orders the filing of a progress report on the investigation on the next hearing date to monitor compliance with the conditions set forth.