2020 (6) TMI 378 - HC - GST

Grant of Bail - Input Tax Credit - fake bill entries - HELD THAT - Considering the facts that claim of input tax credit without there being any transaction directly affects the economy of the country petitioner has claimed input tax credit to the tune of 11.6 crores the bail application is not entertained. Bail application dismissed.

Summary

Issues: Bail application under Section 439 of Cr.P.C. for offence under Sections 132(1)(b)(c) r/w Section 132(1)(i) of Central Goods and Services Tax Act, 2017.

Analysis:
- The petitioner filed a bail application under Section 439 of Cr.P.C. for an offence under Sections 132(1)(b)(c) r/w Section 132(1)(i) of the Central Goods and Services Tax Act, 2017.
- The petitioner's counsel argued that the individuals who raised the issue were not accused in the case, and the petitioner had already spent five months in custody, which is the maximum sentence under the Act.
- The Union of India's counsel opposed the bail application, alleging that the petitioner claimed input tax credit of ?11.6 crores without any actual transactions. The vehicles supposedly used for transporting goods to the petitioner were suspiciously inappropriate for such purposes, indicating fake bill entries to claim the tax credit.
- The court considered the arguments presented and noted that claiming input tax credit without actual transactions directly impacts the country's economy. Given the substantial amount involved (?11.6 crores), the court declined to entertain the bail application.
- Consequently, the criminal miscellaneous bail application was rejected by the court.

This judgment highlights the seriousness with which the court views offenses related to fraudulent claims of input tax credit, emphasizing the economic impact of such actions. The decision underscores the court's commitment to upholding the integrity of tax laws and preventing abuse that could harm the country's financial stability.