2021 (3) TMI 97 - DSC - GST

Seeking Grant of bail - case of accused/applicant is that accused has been falsely implicated in this case and he do not have any concern with the alleged firms - availment of fraudulent ITC - connection of accused with the offence - It is alleged that for the purpose of commission of offence, bogus firms were created in even in the name of the employees of the accused and these firms were used for the purpose of availament of fraudulent ineligible tax credit - HELD THAT - The offence alleged against the accused is grave in nature in which a huge amount of ITC claim is involved. In commission of offence there is no actual purchase or sale of goods or hiring or rendering of services by projecting a huge turnover that remained only on papers. In such cases, the Government is not only deprived of what is due to them. But in fraudulent ITC claims, of the nature allegedly made against the accused, a huge liability is created for the Government. Conduct of accused is also shown non-cooperative during investigation. Role of accused being the main person in the commission offence has been shown. Such acts of creating fictitious firm and bogus bill for the purpose of availing benefit from the government causes heavy losses to the exchequer. Considering the facts and circumstances of the case, gravity of offence, role of accused and evidence surfaced against the accused till date, I do not find that this is a fit case to grant bail to the accused/applicant at this stage - Application dismissed.

Summary

Issues:
1. Bail application on grounds of false implication, lack of connection to alleged firms, and custody period.
2. Opposition to bail based on gravity of offense, large fraudulent ITC amount, and direct connection of accused.
3. Allegations of involvement in issuance of ineligible/bogus ITC, creation of fake firms, and masterminding fraudulent activities.
4. Existence of non-existent firms, operation by accused, recovery of incriminating evidence, and grave nature of offense causing substantial losses to the government.
5. Denial of bail based on gravity of offense, accused's role, evidence, and non-cooperation during investigation.

Analysis:
1. The bail application was filed by the accused's counsel, arguing false implication, lack of connection to alleged firms, and a custody period exceeding 50 days. Citing relevant judgments, the counsel contended that the accused had not fraudulently availed Input Tax Credit (ITC) and disputed the address mentioned by the Department as belonging to the accused.

2. The opposition to bail was based on the gravity of the offense, a significant amount of fraudulent ITC, and the direct involvement of the accused. The department's counsel highlighted statements of employees supporting the allegations and referenced several judgments to strengthen their argument against granting bail.

3. The case involved the accused's arrest for involvement in issuing ineligible/bogus ITC through fake firms, amounting to substantial sums without actual goods supply. The accused, as the director of a firm, allegedly availed ITC through fraudulent means, creating bogus firms, including those in employees' names, to claim false ITC credits.

4. Allegations included the use of non-existent firms for ITC credit through the accused's firm, creation of firms in employees' names, and recovery of incriminating evidence like laptops showing the accused's involvement. The offense was deemed grave due to the substantial ITC claims without actual transactions, causing significant losses to the government.

5. The court denied bail considering the gravity of the offense, the accused's pivotal role, evidence against the accused, and non-cooperation during the investigation. The decision was based on the substantial liability created for the government through fraudulent ITC claims, emphasizing the accused's actions causing losses to the exchequer. The bail application was dismissed based on these factors.