2021 (6) TMI 158 - DSC - GST

Seeking grant of Bail - fraudulent availment of input tax credit - evasion of duty - cognizable and non-bailable offence - HELD THAT - During his statement recorded by the DGGI, GRU, Ghaziabad the applicant admitted he has irregularly availed the input tax of ₹ 1.30 Crore and assured the officers he will deposit the entire dues of G.S.T. but due to financial conditions he is unable to pay the same. The applicant also stated in his statement that for the purpose of purchase he is not in direct touch with the suppliers and even not know the proprietors of the firms. The applicant about total ITC of ₹ 8,52,43,881/availed by him, did not explain properly and reply satisfactorily. The applicant is sole proprietor of his firm and responsible for every act of his firm. Suffice to say prima-facie, the accused has committed an economic offence and caused monetary loss to the State which is most harmful. Investigation is still underway. This case is not fit for bail to be granted - bail application dismissed.

Summary

Issues:
Bail application under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the Central Goods and Services Tax Act, 2017.

Detailed Analysis:

1. Arrest and Allegations:
The accused, Vinod Kumar, was arrested by the Directorate General of Goods and Service Tax Intelligence (DGGI), Ghaziabad, for offenses under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the CGST Act. The allegations include availing fake Input Tax Credit (ITC) of ?1.30 Crore through non-existent entities and failure to produce essential documents related to transactions.

2. Defense Arguments:
The defense counsel argued that the applicant is a legitimate businessman, cooperated with authorities during investigations, and was arrested without any formal demand against him. It was contended that the arrest was illegal as there was no FIR or complaint filed, and the applicant's custody was unjustified.

3. Prosecution's Stand:
The special prosecutor opposed the bail application, emphasizing that the accused committed a cognizable and non-bailable offense under the CGST Act. The prosecution highlighted discrepancies in the accused's statements regarding the availed ITC and lack of cooperation in providing necessary documents.

4. Judicial Evaluation:
The Additional Sessions Judge considered the seriousness of the economic offense and the ongoing investigation. Despite the applicant's health conditions and other arguments, the judge found the case unsuitable for bail, citing the gravity of the alleged offense and potential monetary loss to the state.

5. Decision:
After thorough consideration of arguments and case details, the bail application of the accused, Vinod Kumar, was rejected by the court. The judge concluded that given the circumstances and the nature of the offense, bail was not warranted, without making any judgment on the case's merits.

In conclusion, the court's decision to deny bail was based on the gravity of the alleged offense, the ongoing investigation, and the potential monetary loss to the state. The judgment highlighted the accused's failure to provide essential documents, discrepancies in statements, and the seriousness of the economic offense, leading to the rejection of the bail application.