2023 (12) TMI 1205 - HC - VAT and Sales Tax

Seeking release on regular bail - claiming bogus refund on account of input tax credit - use of false and fabricated documents - HELD THAT - A Co-ordinate Bench of this Court in Ashwani Kumar Vs. State of Punjab 2023 (6) TMI 188 - PUNJAB AND HARYANA HIGH COURT examined the provisions of Sections 57 58 of the Punjab Value Added Tax Act, 2005, providing for penalty for failure to issue invoices and use of false invoices and observed that allegations of the FIR are squarely covered under the provisions of Sections 57 58 of the 2005 Act. It was further observed that the 2005 Act is a complete Code in itself and there is no provision provided in the 2005 Act for registration of the FIR. It was further observed that the 2005 Act only provided for imposition of penalty in case there is any contravention of its provisions and since the 2005 Act is a special law, principle of generalia specialibus non derogant would apply, meaning thereby it would operate in exclusion to the general law i.e., the IPC. However, this Court notices that in the absence of factual matrix in Ashwani Kumar s case, it is not possible to comment as to whether in those cases also, there were allegations regarding bogus refund of input tax credit based on false and fabricated documents. In these circumstances, it will be a debatable issue as to whether the provisions of IPC shall be applicable to the present case or not. No explanation is given in the FIR about the delay of more than 5 years so as to write a letter to the Superintendent of Police, Sirsa on 11.12.2019 to take action against the culprits and then another approximately one year for getting the FIR registered on 24.10.2020. Thus, no purpose shall be served by keeping the petitioners detained, particularly when no apprehension has been expressed by ld. State counsel that if released on bail, petitioners may abscond from justice - petition allowed.

Summary

Issues involved:
The judgment involves issues related to the grant of regular bail to the petitioners in a case involving economic offences causing loss to the State exchequer. The case pertains to alleged violations of the Haryana Value Added Tax Act, 2003 and the Indian Penal Code, 1860.

Issue 1: Allegations of Fraudulent Refund of Input Tax Credit

The FIR was based on a complaint regarding a firm involved in claiming bogus refund on account of input tax credit through false and fabricated documents. The dealer obtained refunds using forged documents related to interstate sales of cigarettes and tax-free commodities. The petitioners were accused of being part of this fraudulent scheme.

Issue 2: Bail Petitions and Contentions

In the bail petitions, the petitioners argued their innocence based on their roles in the transactions. One petitioner claimed to be merely a commission agent who inadvertently contravened tax laws, while the other petitioner contended that he was not directly involved in the alleged offenses as he had passed the final assessment order based on the assessment done by another officer.

Issue 3: Delay in Filing FIR and Completion of Investigation

The defense highlighted an unexplained delay of over 8 years from the date of the alleged offense to the filing of the FIR. They emphasized that the investigation was already concluded, and there was no risk of the petitioners absconding. The defense also pointed out that the case relied heavily on documentary evidence.

Issue 4: Legal Interpretation of Applicable Laws

The Court examined the provisions of the Punjab Value Added Tax Act, 2005 and observed that the allegations in the FIR fell under specific sections of the Act. The Court noted that the Act was a special law dealing with tax evasion and that the registration of FIR under the IPC might not be necessary in such cases.

Final Decision and Grant of Bail

Considering the circumstances, including the completion of investigation, lack of flight risk, and the fact that the charges were yet to be framed, the Court granted regular bail to the petitioners. The Court emphasized that the petitioners should furnish the required bail and surety bonds and adhere to standard bail conditions. The decision was made without commenting on the merits of the case.