2022 (4) TMI 813 - DSC - GST

Seeking grant of Anticipatory Bail - alleged inadmissible input tax credit - Section 70 of the CGST Act - ongoing investigation - It is argued that subsequent thereto, fresh summons have been issued to them, and there is apprehension that they might be apprehended falsely into the present case and hence the present applications were moved. - HELD THAT - Considering the fact that applicants have already paid a sum of ₹ 10 crores against the alleged inadmissible input tax credit to the tune of ₹ 70 crores at best as per its own claim of the department, and reading the facts, in the light of the judgment of C. PRADEEP VERSUS THE COMMISSIONER OF GST AND CENTRAL EXCISE SELAM ANR. 2019 (11) TMI 659 - SUPREME COURT the recent judgment of TARUN JAIN VERSUS DIRECTORATE GENERAL OF GST INTELLIGENCE DGGI 2021 (12) TMI 135 - DELHI HIGH COURT , it is hereby directed that in the event of arrest, both the applicants namely Danish Sharma Naveen Chauhan be released on their furnishing personal bonds in the sum of ₹ 1 lakh with two local sureties of the like amount each, subject to the terms and conditions imposed. Application allowed.

Summary

Issues:
1. Alleged inadmissible input tax credit availed by the accused.
2. Search and seizure conducted at the company's premises.
3. Statements recorded under Section 70 of the CGST Act.
4. Arguments for and against bail applications.
5. Precedents cited in support of contentions.
6. Concessions made during proceedings.
7. Bail conditions imposed by the court.

Issue 1: Alleged inadmissible input tax credit availed by the accused:
The accused are alleged to have availed inadmissible input tax credit from non-existent/fictitious firms, amounting to approximately ?43 crores, with ?21.58 crores established so far. These facts were admitted by the accused in their statements recorded under Section 70 of the CGST Act.

Issue 2: Search and seizure conducted at the company's premises:
A search and seizure operation was conducted at the company's premises on 23.03.2022 under Section 67(2) of the CGST Act. The principal place of business was found non-operational, and raids on two other suppliers revealed that they had issued invoices without providing any goods or services.

Issue 3: Statements recorded under Section 70 of the CGST Act:
The accused were summoned under Section 70 of the CGST Act and their statements were recorded during the search and seizure operation. They were allegedly pressurized to deposit a sum of ?5 crores each against their will.

Issue 4: Arguments for and against bail applications:
The defence counsel argued that the accused had cooperated with the investigation, and no custodial interrogation was required as they were law-abiding citizens. The Senior Standing Counsel opposed the bail applications, citing the magnitude of the alleged tax credit fraud and ongoing investigation.

Issue 5: Precedents cited in support of contentions:
The defence counsel cited various judgments to support their contentions, including the case of Tarun Jain vs. DGGI and other relevant cases to argue that the accused's case was covered under those judgments.

Issue 6: Concessions made during proceedings:
During the proceedings, it was revealed that the accused had already deposited ?10 crores against the alleged liability, which may exceed ?70 crores. There were no current allegations of tampering with evidence or hindering the investigation against the accused.

Issue 7: Bail conditions imposed by the court:
Considering the facts and arguments presented, the court directed the release of the accused on furnishing personal bonds and sureties, subject to conditions such as not hampering the investigation, joining when required, providing contact details, and informing any change in personal information or travel plans.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the arguments, concessions, and final decision of the court regarding the bail applications in the context of the alleged tax credit fraud investigation.