2022 (2) TMI 189 - DSC - GST

Input tax credit - applicant has apprehension that he might be apprehended in a false case - Section 70 of the CGST Act - HELD THAT - In the facts and circumstances of the case, taking note of the role of the applicant and the fact that as of now the department itself is not having any material against the present applicant nor anything to show his involvement into the alleged offence, read in the light of the order passed by the Hon'ble High Court, in SAURAV GUPTA VERSUS CGST (DELHI EAST) 2021 (6) TMI 82 - DELHI HIGH COURT , it is hereby directed that if the respondent authority decides to proceed under Section 69 of the CGST Act and take coercive action against the applicant in the present case, a seven days advance notice shall be served upon the applicant, subject to the condition that he shall appear and join the investigation as and when directed to do so and provide all the necessary information and documents. Application disposed off.

Summary

Issues:
Grant of anticipatory bail under Section 438 Cr. PC based on apprehension of being falsely implicated in a case related to fraudulent availment of ITC under CGST Act.

Analysis:
The application was filed by the accused seeking anticipatory bail under Section 438 Cr. PC due to fear of being falsely implicated in a case involving false tax input credits related to a specific company. The applicant's counsel argued that the accused had no connection with the company under investigation, neither as a proprietor, partner, employee, nor business associate. It was mentioned that even though the applicant's father was a Director in the company, he had resigned from that position. The summons issued by the department was criticized for being vague and ambiguous, lacking clarity on the evidence required or documents to be furnished.

During the proceedings, it was revealed that the investigation was at a preliminary stage, and the applicant was summoned to determine his role in a case concerning fraudulent availment of ITC by another company. The prosecution contended that the application was premature and should be dismissed. However, the applicant's counsel cited a previous High Court order and expressed willingness to cooperate with the investigation, seeking interim protection as per the mentioned order.

Considering the circumstances and the lack of evidence linking the applicant to the alleged offense, the court directed that if the department decides to take coercive action under Section 69 of the CGST Act, a seven-day advance notice must be served to the applicant. The condition was imposed that the applicant must cooperate with the investigation, provide necessary information and documents when directed to do so. The application for anticipatory bail was disposed of based on these directions, with copies of the order provided to all concerned parties and uploaded on the court's official website.