2023 (1) TMI 233 - HC - GST

Seeking grant of anticipatory bail - availment of input tax credits completely in breach of the provisions of Section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 - HELD THAT - Considering that the matter is still under preliminary investigation and as the opinion has not been formed yet by the authorised officer whether to arrest the applicants or not, interest of justice would be subserved if a direction is issued to the applicants to cooperate - In case, if the Investigating Officer wants to effect the arrest if he feels that arrest is imperative in the wake of the reasons recorded by him, he may effect the arrest after giving 72 hours notice in advance to the applicants in the peculiar facts of this case. The Anticipatory Bail Application is disposed of with a direction to the applicants to co-operate.

Summary

Issues: Alleged fraudulent availment of input tax credits under the CGST Act, 2017; Cooperation of applicants with investigating authorities; Anticipatory Bail Application

Alleged fraudulent availment of input tax credits under the CGST Act, 2017:
The judgment revolves around the allegation made by the Goods and Service Tax Department against the applicants for purportedly availing input tax credits in violation of Section 132(1)(b) and (c) of the CGST Act, constituting a cognizable offense under Section 132(5) of the same Act. The applicants, through their counsel, assert that they possess receipts to refute any fraudulent activity concerning the input tax credits. On the other hand, the department's counsel contends that the investigation is ongoing, and the authorities are in the process of determining whether to proceed against the applicants. The court acknowledges the preliminary stage of the investigation and emphasizes the importance of cooperation from the applicants at this juncture, without making any conclusive findings regarding the alleged offense.

Cooperation of applicants with investigating authorities:
A crucial aspect of the judgment pertains to the level of cooperation exhibited by the applicants with the investigating officer. The department's counsel raises concerns about the lack of cooperation, stating that the applicants have not been forthcoming with requested materials and have hesitated to provide necessary information. In response, the applicants' counsel assures the court that the applicants are willing to cooperate fully and undertake to furnish all relevant invoices and materials in their possession. The court, recognizing the significance of cooperation in the investigative process, issues a direction to the applicants to cooperate with the investigating authorities. Furthermore, the court allows for the possibility of arrest if deemed necessary by the Investigating Officer, provided that a 72-hour notice is given to the applicants in advance under the unique circumstances of the case.

Anticipatory Bail Application:
The Anticipatory Bail Application filed by the applicants is disposed of by the court with a specific directive for the applicants to cooperate with the investigating authorities. The court's decision underscores the importance of active cooperation from the applicants during the ongoing investigation while also acknowledging the apprehensions expressed by the applicants regarding potential arrest. By providing a timeline for appearance and emphasizing the need for cooperation, the court aims to balance the interests of justice with the rights and concerns of the applicants in the context of the alleged offense under the CGST Act, 2017.

This detailed analysis of the judgment highlights the key issues addressed by the court concerning the alleged fraudulent availment of input tax credits, the cooperation of the applicants with the investigating authorities, and the disposal of the Anticipatory Bail Application in the context of the provisions of the CGST Act, 2017.