2021 (7) TMI 807 - DSC - GST

Grant of Anticipatory Bail - fraudulent transfer of input tax credit - evasion of huge amount of GST by procuring invoices without actual supply of goods - applicant is partner in M/s Martiz Cera against which allegations of tax evasion is framed - offence u/s 132 (1)(b) and 132(1)(c) of the Central Goods and Services Tax Act and Gujarat Goods and Services Tax Act - HELD THAT - As per the case of prosecution, false Input Tax Credit to the tune of ₹ 18.04 crores has been availed by the firms of the applicant, his brother and father on the strength of invoices supplied by Virat Dhanjibhai Bhatiya under the bogus firms. All are made accused in the present case. However, so far as the present applicant is concerned, admittedly he is one of the partner in M/s Martiz Cera against which allegations of tax evasion are to the tune of ₹ 32 Lakhs. So, far as other firms namely M/s Himat Trading and M/s Action Industries are concerned, same are respectively of the proprietorship of father and brother of the applicant. It is not the case of the respondent that the father and brother of the applicant were not managing the affairs of those firms and were not aware of the transactions of those firms - applicant is ready and willing to deposit the amount of ₹ 32 Lakhs with the respondent within a period of four weeks from today so far as the liability respecting Martiz Cera is concerned. The applicant has further agreed to provide co-operation to the investigation /Intelligence Officers of the Department ongoing investigation against him. In ABHINAY ANIL AGRAWAL VERSUS STATE OF GUJARAT 2020 (2) TMI 1527 - GUJARAT HIGH COURT , the Hon'ble High Court has grated bail to the applicant in similar type of case on deposit of amount of ₹ 1 Crore. It is deemed fit to exercise discretion in favour of the applicant for grant of bail under section 438 of Cr. P. C., subject to conditions imposed - application allowed.

Summary

Issues:
Anticipatory bail application under Section 438 of Cr. P. C. for apprehending arrest in Case No. (DGGI/RRU/12(4)-14/2020-21) for offences under Section 132(1)(b) and 132(1)(c) of the Central Goods and Services Tax Act and Gujarat Goods and Services Tax Act.

Detailed Analysis:
1. Allegations and Defence:
The prosecution alleges fraudulent transfer of input tax credit and GST evasion amounting to ?18.04 Crores by the applicant through invoices without actual supply of goods. The applicant denies involvement, claiming false implication and cooperation with authorities. The defense argues that the applicant's father was coerced into a statement, later retracted. The applicant's lack of criminal history, cooperation, and readiness to face trial are emphasized.

2. Legal Arguments:
The defense argues that no punishment is prescribed for tax evasion under ?1 Crore, highlighting the applicant's permanent residence and willingness to cooperate. Precedents such as Choodamani Parmeshwaran Iyer and Pawan Goel are cited to support the bail application.

3. Prosecution's Case:
The prosecution contends that the applicant availed ?18.04 Crores of input tax credit without actual goods receipt, causing a substantial loss to the exchequer. They assert the applicant's active involvement in fraudulent activities with fake firms, including raising invoices without goods supply. Co-accused confessions and discrepancies in e-way bills are presented as evidence.

4. Judicial Analysis and Decision:
The court notes the applicant's partnership in M/s Martiz Cera with tax evasion allegations of ?32 Lakhs. Considering similar cases where bail was granted on deposit amounts, the court exercises discretion in favor of the applicant. Anticipatory bail is allowed with conditions, including a personal bond, cooperation with investigation, depositing ?32 Lakhs, surrendering passport, and not leaving India without court permission.

Conclusion:
The court grants anticipatory bail to the applicant in the tax evasion case, acknowledging the specific allegations against the applicant and the willingness to cooperate. Conditions are imposed to ensure compliance and cooperation with the investigation and legal proceedings. The judgment considers legal arguments, prosecution's case, and precedents to arrive at a decision in the applicant's favor with specified conditions for bail.