2022 (7) TMI 66 - DSC - GST

Seeking of regular bail - availment of fraudulent ITC on the basis of goods less and bogus purchase invoices from nonexistent and fraudulent firms - fake/bogus firms - HELD THAT - The allegations against the applicant-accused Gaurav Dhir pertains to being instrumental in filing of refund claims on behalf of the Firms, which were later on found to be fake and non-existing and for the said purpose he also issued CA certificate by forging signatures of co-accused Sunil Mehlawat and uploaded the same for the purpose of facilitating the said refund. The allegations qua the applicant-accused Sunil pertains to giving his UDIN and password to the co-accused Gaurav Dhir and also sharing his OTP with him for the said purpose. There is no dispute with the fact that the same was issued by the applicant-accused Gaurav Dhir by forging signatures of co-accused Sunil. Even learned counsel for applicant-accused Sunil has alleged so and the said fact is not denied by learned counsel for the applicant-accused Gaurav Dhir. The question that if there was any legal requirement to file said certificate or not, has become irrelevant especially when the forged document has been presented before the concerned authorities for the purpose of facilitation of refund. The entire argument that there was no legal requirement for the applicant-accused Gaurav Dhir to file such certificate as CA falls to the ground when the said certificate has been forged by the accused and used for the purpose of refund. It is not the matter of mere initiation of refund under the CGST Act only, rather now it appears to have become an offence punishable under Sections 420/467/468/471 of IPC wherein the maximum punishment prescribed is imprisonment for life. So far as offences punishable under Section 132 of CGST Act, 2017 is concerned, as already discussed above, apart from these offences, the offence punishable under Sections 420/467/468/471, IPC are also prima facie made out against the applicants-accused Gaurav Dhir and Sunil. The authorities relied upon by learned counsel for the applicants-accused are not applicable to the facts of the present case especially when the applicants-accused have been involved in forging certificate and submitting the same to the concerned authorities for the purpose of taking refund claim and thus, creating a picture in the mind of the concerned agencies that the professional CA i.e. the person who has issued the certificate had gone through the entire record and had verified the same. Considering the gravity and the nature of the allegations levelled against the applicant-accused and the fact that the investigation of the case is at nascent stage and further considering the fact that now a days economic offences are rampant and should be dealt with the firmness, this court does not deem it proper to grant the concession of bail to both the applicants-accused at this stage - keeping in view the gravity and seriousness of the offences, both the present bail applications filed on behalf of the applicants-accused are hereby dismissed.

Summary

Issues Involved:
1. Whether the applicants-accused Gaurav Dhir and Sunil Mahalawat should be granted bail.
2. Whether the applicants-accused were involved in the fraudulent activities as alleged.
3. Whether the offenses under Sections 132(1)(i) r/w 132(1)(b)(c)(e)(f) of CGST Act, 2017, and other relevant sections of IPC are made out against the applicants-accused.

Issue-wise Detailed Analysis:

1. Whether the applicants-accused Gaurav Dhir and Sunil Mahalawat should be granted bail:
The court considered the arguments presented by the counsel for the applicants-accused and the respondent. The applicants-accused argued that they were falsely implicated and had no involvement in the fraudulent activities. They emphasized that the offenses under Section 132(1)(e)(f) of the CGST Act are bailable, and the other sections are not applicable. They also argued that the investigation is documentary in nature, and there is no likelihood of influencing witnesses or requiring custodial interrogation. However, the court noted the seriousness of the allegations and the potential for the applicants-accused to distort or destroy evidence if released on bail. The court cited the Supreme Court's observation that economic offenses need to be viewed seriously and dealt with firmness. Consequently, the court denied bail to both applicants-accused, considering the gravity and seriousness of the offenses and the nascent stage of the investigation.

2. Whether the applicants-accused were involved in the fraudulent activities as alleged:
The prosecution's case was based on the development of intelligence by the officers of Anti Evasion, CGST, revealing that non-existent and bogus firms were accumulating fraudulent ITC and claiming inverted tax refunds using fake documents, including CA certificates. The investigation found that the applicants-accused, both Chartered Accountants, were misusing their UDIN credentials and issuing false CA certificates to enable the bogus firms to claim refunds. The court noted that the applicant-accused Gaurav Dhir was instrumental in filing refund claims on behalf of fake firms and issued CA certificates by forging the signatures of co-accused Sunil Mahalawat. The court also noted that Sunil provided his UDIN, password, and OTP to Gaurav, facilitating the fraudulent activities. The court found that these acts went beyond professional misconduct and constituted criminal offenses.

3. Whether the offenses under Sections 132(1)(i) r/w 132(1)(b)(c)(e)(f) of CGST Act, 2017, and other relevant sections of IPC are made out against the applicants-accused:
The court observed that the allegations against the applicants-accused indicated offenses punishable under Sections 132(1)(i) r/w 132(1)(b)(c)(e)(f) of the CGST Act, 2017, as well as Sections 420, 467, 468, and 471 of the IPC. The court noted that the forged CA certificates were presented to facilitate refunds, constituting offenses under the IPC. The court expressed surprise that the investigating officer had not added the IPC offenses against the accused but acknowledged that these offenses were prima facie made out. The court emphasized the gravity of the offenses, involving well-qualified professionals who knowingly committed the acts, leading to serious repercussions and criminal offenses.

Conclusion:
The court denied bail to both applicants-accused, considering the gravity and seriousness of the offenses, the nascent stage of the investigation, and the potential for the applicants-accused to distort or destroy evidence. The court highlighted the need to view economic offenses seriously and deal with them firmly. The observations made were solely for the purpose of deciding the bail applications and should not be construed as reflections on the merits of the case.