2021 (1) TMI 967 - HC - GST

Grant of anticipatory Bail - irregular input tax credit on the basis of invoices generated by the non-existing firms formed by the petitioner himself in the name of his employees - Section 438 of Cr.P.C - HELD THAT - As per rejection bail order petitioner is proprietor of M/s Allied Enterprises and had purchased the goods amounting to about 32 Crore and got 4.97 Crore of input tax credit and the department is investigating the matter. If the petitioner is found to be correct he should have to personally produce all the documents before the department and would also raise his grievance as to why he is not appearing before the department but he failed to clarify all these things. Considering the submissions made by learned counsel for CGST and taking into consideration overall facts and circumstances of the case but without expressing any opinion on the merits/demerits of the case it is not deemed proper to enlarge the petitioner on anticipatory bail - this anticipatory bail application is dismissed.

Summary

Issues:
1. Anticipatory bail application under Section 438 Cr.P.C in connection with arrest under Sections 67 and 70 of the Central Goods and Services Tax Act, 2017.

Analysis:
The petitioner, through counsel, claimed cooperation with the Revenue Department, submission of necessary information, and validity of all transactions. The petitioner's health condition was cited, along with references to decisions from Karnataka and Gujarat High Courts favoring anticipatory bail. The petitioner sought anticipatory bail based on these grounds.

The CGST counsel argued that during a search, the petitioner was not present at the premises, highlighting irregularities in input tax credit availed by M/s Allied Enterprises. Allegations included availing credit based on invoices from non-existent firms linked to the petitioner and evading investigation. The CGST counsel requested the dismissal of the anticipatory bail application based on these findings.

The court noted the petitioner's status as the proprietor of M/s Allied Enterprises and the substantial amount involved in purchases and tax credit. The court emphasized the petitioner's failure to provide documents, attend summons, or clarify his absence from the investigation. Considering the arguments from both sides and the case circumstances, the court decided not to grant anticipatory bail, dismissing the application without expressing any opinion on the case's merits.

In conclusion, the court dismissed the anticipatory bail application, citing the petitioner's lack of cooperation with the investigation and failure to address concerns raised by the Revenue Department. The decision was based on a detailed assessment of the petitioner's actions, the allegations of irregularities, and the overall context of the case, without delving into the case's merits.