2021 (4) TMI 831 - HC - GST

Seeking Bail - Wrongful availment or utilization of input tax credit or refund of tax - Supply of goods and services or both without issue of any invoice - issuance of invoices and bills without supply of goods or services or both - offences are punishable under Section 132 (1) (a)(b) of the CGST Act - HELD THAT - Relying on the decision of the Hon ble Supreme Court in C. PRADEEP VERSUS THE COMMISSIONER OF GST AND CENTRAL EXCISE SELAM ANR. 2019 (11) TMI 659 - SUPREME COURT and in view of the fact that final assessment has not been made under Section 74 of the said Act, the petitioner is entitled to be released on bail of ₹ 5 lakhs with 5 sureties of ₹ 1 lakh each with further condition that within 15 days from the date of his release on bail, the petitioner shall deposit a sum of ₹ 91 lakhs with the appropriate officer. The petitioner shall cooperate with the investigation of the case. Both the prosecution and the petitioner are directed to sit across the table and beside the amount payable by him towards GST.

Summary

Issues:
- Bail application under section 439 of the Code of Criminal Procedure for alleged GST violations.
- Allegations of supplying goods without invoices and wrongful issuance of invoices.
- Interpretation of Sections 132(1)(a)(b), 74, and 70 of the CGST Act.
- Precedents regarding payment of disputed liabilities and bail conditions.
- Assessment of GST dues and conditions for release on bail.

Analysis:
The petitioner, a director of two companies dealing with Pig Iron supply, sought bail in a case involving GST violations. The allegations included supplying goods without invoices and issuing invoices without actual supply, both leading to tax evasion under CGST Act, punishable under Section 132(1)(a)(b). The petitioner argued that he should have been served a notice under Section 41A and pointed out his payment of &8377;40 lakhs towards GST.

The legal counsels emphasized Section 74, stating that the accused should have been given a chance to pay the due tax before arrest. Reference was made to the power of summoning under Section 70, highlighting that the petitioner was arrested without a determination of GST payable. A Supreme Court decision in a similar case was cited to support the petitioner's plea for bail.

The prosecution opposed the bail application, but the court decided to assess the GST dues payable by the petitioner. It was revealed that &8377;9.10 crores was due towards GST payment. Relying on previous legal precedents, the court granted bail on the condition that the petitioner pays &8377;5 lakhs with sureties and deposits &8377;91 lakhs within 15 days of release. Cooperation with the investigation was mandated, and both parties were directed to negotiate the amount payable by the petitioner.

In conclusion, the court granted bail to the petitioner based on the assessment of GST dues and set conditions for release, emphasizing cooperation with the investigation and negotiation on the outstanding amount payable.