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2022 (10) TMI 619 - DSC - GSTSeeking grant of Bail - record of false fabricated record for the purpose of availment of ITC present or not - it is contended that applicant is cooperated investigating agency reversed ITC availed by them as well as paid amount of Rs.10, 39, 00, 000/and shown readiness to deposit Rs.5 crores each month under protest till settlement of their liability - HELD THAT - Prima facie it appears that there is no intention of applicant to avail ITC illegally. Further tax liability shown against them is in dispute for legal interpretation still applicant is ready to deposit amount of Rs.5 crores per month by their letter submitted to GST Authorities on 22.09.2022. In such circumstances it is opined that applicant is not running to avoid legal process. They have shown cooperation by way of reversing ITC as well as paying amount of Rs.10, 39, 00, 000/- - In view of the fact coming forth from submissions from both sides there is no prima facie intention fraud of any record for claiming Input Tax Credit as well as there is no any prima facie false and fabricated record for the purpose of evasion of any tax. Applicant is coming with bonafide by making statement that he is ready to pay any tax which is liable to pay after legal interpretation about their liability. On the basis of proposal before GST Authorities to pay amount of Rs.5 crores per month till settlement of the amount and by taking appropriate surety and condition to cooperate GST Authorities till pending investigation applicant be released on bail - Application allowed.
Issues:
Application for bail under Section 439 of Cr. P.C. based on alleged GST Act violations involving inadmissible input tax credit and evasion of GST amounting to Rs. 41 crores. Detailed Analysis: The applicant, involved in a contract farming business, sought bail contending that the GST Authorities have not filed any complaint against him and that the offense under Section 132 of the GST Act is compoundable. The applicant's firm, dealing with agricultural business, claimed they are not liable to pay GST as per Notification No.12/2017/Central Tax. The applicant offered to pay any liability and deposit Rs. 5 crores per month till settlement, asserting cooperation with the investigating agency and readiness to comply with legal obligations. The GST Authorities opposed the bail application, highlighting that the applicant and his firm utilized inadmissible input tax credit, leading to an evasion of Rs. 41 crores. They argued that the offense is serious due to the significant amount involved, constituting an economic offense warranting detention. Upon examination, it was revealed that the applicant's firm had reversed the inadmissible input tax credit and deposited a substantial amount. The prosecution did not allege forgery of documents by the applicant or his firm for tax benefits. The applicant's willingness to deposit Rs. 5 crores monthly, along with the disputed tax liability, indicated no fraudulent intent in availing the input tax credit illegally. The Court noted the lack of progress in the investigation during the 55-day custody period and the applicant's cooperation by reversing the input tax credit and making payments. Considering the applicant's proposal to pay monthly installments, the Court found no prima facie intention to evade taxes fraudulently. Consequently, the Court granted bail to the applicant under specified conditions, emphasizing cooperation with the investigating authorities and compliance with legal obligations. In the final order, the Court allowed the bail application, directing the applicant to furnish a personal recognizance bond and sureties, comply with the proposed monthly payments, attend the investigating officer's office, provide contact details, refrain from influencing witnesses, and seek court permission before leaving India. The Court disposed of the bail application accordingly.
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