2021 (5) TMI 94 - HC - GST

Grant of Anticipatory Bail - valid and genuine purchases or not - HELD THAT - Perusal of the anticipatory bail application does not bring out any material or reason to believe that any such inference is being drawn or is being sought to be drawn by the revenue authorities against the applicant, presently. Merely because the applicant has been called upon to participate in the inquiry against M/s. G.K. Traders, does not involve an automatic accusation against the applicant and it also does not involve the risk of his arrest. At present, the applicant claims that he had made genuine purchases from the said M/s. G.K. Traders for which he had made payments and had thereafter sold the goods to third parties. Accordingly, leaving it open to the applicant to lead such evidence before the revenue authorities, at present, no real apprehension is found to exist of the applicant being arrested - Application rejected.

Summary

Issues:
- Application for anticipatory bail against summons under Section 70 of the Central Goods and Services Tax Act, 2017.
- Validity of purchases made from M/s. G.K. Traders.
- Potential arrest threat due to ongoing inquiry against M/s. G.K. Traders.
- Requirement for applicant's presence in the inquiry to establish genuineness of invoices.
- Possibility of applicant's arrest based on involvement with fake or bogus invoices.
- Evaluation of evidence and lack of material basis for arrest apprehension.

Analysis:
The judgment addresses an anticipatory bail application filed by an individual against summons issued under Section 70 of the Central Goods and Services Tax Act, 2017. The applicant claimed to have made valid purchases from M/s. G.K. Traders and highlighted the threat of arrest despite the genuineness of the transactions. The court noted an ongoing inquiry against M/s. G.K. Traders regarding forged invoices, which necessitated the applicant's participation to establish the authenticity of the invoices in question. However, the court emphasized that mere participation in the inquiry did not automatically lead to the applicant's arrest, especially without concrete evidence linking him to any fraudulent activities.

The judgment highlighted that even if certain invoices from M/s. G.K. Traders were found to be fake, it did not automatically implicate the applicant unless there was evidence of his involvement or collusion. The court emphasized the need for revenue authorities to establish that the applicant had benefitted from fraudulent invoices before considering any accusations or arrests. The court found no basis to infer such involvement presently and emphasized the applicant's claim of genuine transactions with M/s. G.K. Traders, distinguishing the current case from a previous court order.

Ultimately, the court concluded that there was no real apprehension of the applicant being arrested at the current stage. The judgment allowed the applicant to present evidence before the revenue authorities to support his claims, indicating that the threat of arrest was not substantiated based on the available information. As a result, the anticipatory bail application was rejected, providing clarity on the necessity of concrete evidence linking the applicant to any fraudulent activities before considering arrest.