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TMI Blog2020 (10) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent would submit that invoices and transport bills were submitted to the office of the respondents recently. He would submit, some of the invoices and transport bills were verified by the Officer which revealed that, many of the vehicle numbers are bogus and further also found that vehicle s registration date is latter then the lorry receipt dates. Taking into consideration, the facts of the case, though the officers under the CGST Act, cannot seek custody of the arrested persons for completing the investigation, respondent s contention that applicant s detention in custody is necessary to prevent him from causing the evidence of the offence to disappear or tampering such evidence is well founded - in the larger interest of the public and the State, in serious cases like this, I am not inclined to exercise discretion under Section 439 of the Criminal Procedure Code in favour of applicant no.1. Pre-arrest bail of applicant no.1 is rejected - Pre-arrest bail of applicant no.2 is granted, subject to conditions viz. that in the event of her arrest, she shall be released on bail on furnishing bond in the sum of ₹ 50,000/- with one or more sureties in the like amount - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , M/s. Jai Bajrang Traders is not a genuine firm and moreso, the applicants firm had also failed to produce proof of movement of goods, such as copies of e-way bills or any other proof of receipt or storage of goods. The applicants had also failed to furnish, proof of payment made to M/s. Jai Bajrang Traders within 180 days. It is respondent s case that, as per the provisions of second proviso to Section 16(2) of CGST Act, recipient has to make payment to the supplier of goods within 180 days of issue of invoice, and if he fails to make payment, then an amount equal to Input Tax Credit availed by the recipient shall be added to the tax liability. It is respondents case that, as per the provisions of Section 37(1) read with Rule 59 of CGST Act, every supplier has to furnish details of outward supply of goods in Form GSTR-I. On the basis of GSTR-1 filed by the supplier, Form GSTR-2A is autopopulated at the end of the recipient, wherein all details of inward supplies are captured. During the course of preliminary investigation, though efforts were made to generate GSTR-2A of the applicant s firm from GSTN Portal, the same could not be generated. (E) The investigation further reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 132(5) and punishable with imprisonment for a term which may extend to five years and with a fine under Section 142(1)(i) of the CGST Act. 6. As against this, it is applicants contention that, (i) CGST Act, 2017 prescribes a procedure for assessment even in cases where the information furnished in the return sheet found to have discrepancies and unless a summary assessment/special audit is conducted for determining the liability, no offence can be said to be made out under the Act. In other words, prosecution cannot be launched without assessment and therefore there is no question of arrest. (ii) That even otherwise, the applicants have filed GSTR-3B, returns though belatedly and therefore unless and until returns are scrutinized and the liability is determined, a prosecution cannot be launched. (iii) That once returns are filed, at the highest, the respondents while assessing, are entitled to impose penalty. (iv) In absence of First Information Report (FIR), respondents cannot arrest the applicants. (v) The issue as to whether arrest could be caused, and applicability of Criminal Procedure Code to the proceedings under the CGST Act is pending before the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sole supplier. (iii) GSTR-3B Returns were filed belatedly, as detailed in paragraph-4(C) hereinabove. (iv ) In preliminary investigation, invoices allegedly issued by M/s. Jai Bajrang Traders were found not genuine as applicants had failed to produce proof of movement of goods, copies of e-way bills or any other proof of receipt/storage of goods. (v) M/s. Jai Bajrang Traders, Uttar Pradesh had filed FIR against the applicants for forging their bills and availing Input Tax Credit without there being supply of goods. (vi) That autopopulated Form GSTR - 2A could not be generated since the supplier i.e M/s. Jai Bajrang Traders had not furnished details of outward supply of goods in Form GSTR-I. (vii) Applicants were not in possession of tax invoices or debit note issued by the so-called suppliers registered under CGST Act and had not received the goods while claiming input tax credit. (viii) On verification from E-Way Bill Portal, it is found that no e-way bill has been generated in the name of M/s. Sheela Sales Corporation. (ix) Applicant no.1 is proprietor, partner or Director in five Companies namely, M/s. Sheela Sales Corporation, Chandan Enterprises, M/s. Shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017 a unique E-way bill number (EBN) generated on the common portal is also made available to the supplier, recipient and the transporter of goods. However, applicants have failed to produce EBN particulars, transporter s details, proof of receipt of goods either by himself or his agent or warehouse keeper and payment proof either by himself or by agent or otherwise. 12. It may be stated that, the applicant no.1 in his statement recorded on 9th December, 2019 and 20th January, 2020 admitted, that neither his firm has received goods from M/s. Jai Bajrang Traders nor, has made any payment to M/s. Jai Bajrang Traders. In terms of Section 136 of the CGST Act, disclosure in the statement is relevant for proving any offence under the said Act. It may also be stated that, applicants have not retracted the statements. Under these circumstances, contention of respondents that, fraudulent ITC claim of ₹ 63.53 crores is a matter of grave concern and requires thorough investigation for which applicants presence is absolutely necessary. This contention is well founded and deserves consideration. 13. It appears, the applicants instead cooperating with the ongoing investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants also be protected. . I have perused the order dated 8th July, 2019. It appears, in Sapna Jain s (supra) case on 11th April, 2019 Division Bench of this Court had issued notices to the respondents and directed not to take coercive action against the petitioner till the next date of hearing. Accordingly, petitions were adjourned. On 8th July, 2019, the respondent-Union of India opposed the continuation of the ad-interim relief relying on the order of the Hon ble Apex Court dated 29th May, 2019 passed in Special Leave Appeal (Cri) No. 4322-4324/2019. It reads as under : . SLP (Crl.) Nos. 4322-4324/2019, Diary No. 15477/2019 and SLP (Crl.) No. 4546/2019 . Delay condoned. . Issue notice returnable in four weeks. . As different High Courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this Court. Hence, the notice. . As the accused-respondents have been granted the privilege of pre-arrest bail by the High Court by the impugned orders, at this stage, we are not inclined to interfere with the same. However, we make it clear that the High Courts while entertaining such re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of M/s. Sheela Sales Corporation. M/s. Jai Bajrang Traders only issued invoice in the name of M/s. Sheela Sales Corporation. This admission/statement has not been retracted by the applicant till date. Moreover, applicants did not produce invoice and transport receipts. On the backdrop of these facts, invoice and transport bills produced at the eleventh hour, is nothing but an attempt to prolong the proceedings, so that interim prearrest protection granted by this Court would continue to operate till the bills are verified. . It is to be noted that, applicants in their written submissions did not explain why applicants could not produce invoices and other documents before the respondent-Officer and further when such invoices came in their possession. Applicants ought to have been explained and furnish the explanation in view of the fact that, M/s. Jai Bajrang Traders, the sole supplier has lodged FIR against the applicants for forging the invoices. . Be that as it may, when respondents were confronted with these invoices and transport receipts, learned Counsel for the respondent would submit that invoices and transport bills were submitted to the office of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2019 respectively i.e. after initiation of investigation. Further, the Chartered Accountant has observed that the books of accounts have not been produced for verification. Audit has been carried out on the basis of information and documents before us. Thus, the authenticity of the said Form 3GB is itself in doubt as the same has been prepared without production of books of account. Copies of Form 3GB is annexed herewith. 18. Thus taking into consideration, the facts of the case, though the officers under the CGST Act, cannot seek custody of the arrested persons for completing the investigation, respondent s contention that applicant s detention in custody is necessary to prevent him from causing the evidence of the offence to disappear or tampering such evidence is well founded. Counsel for the respondent has correctly placed reliance on Section 41 of the Criminal Procedure Code in support of his argument and also relied on the Clause (VI) of notings dated 20th January, 2020 which suggest involvement of such two other persons. 19. In view of the facts of the case and in the larger interest of the public and the State, in serious cases like this, I am not inclined to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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