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TMI Blog2022 (7) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. Reliance can be placed in the case of STATE OF GUJARAT VERSUS SHRI MOHANLAL JITAMALJI PORWAL AND ANOTHER [ 1987 (3) TMI 111 - SUPREME COURT ] where it was held that The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rked its presence globally and holds tie up with various big branded clients, including but not limited to, Pepsico, Nestle, Coca Cola, Mars, Unilever, etc. to whom it supplies and export, various consumer products in the segment of branded FMCG, Agro, Spices (Whole/branded/Non branded), Groceries (food/non-food), beverages, Personal Care, Domestic Care, Hygiene and Incant sticks. 2.4 The applicant has obtained all the required registration under law which is applicable upon the business of the such as GST, MSME, etc., and all the registrations stands valid till date. The proprietorship of applicant is also registered under the GST Act vide Registration No.06AXZPP6264B1Z0 (Gurugram) and Registration No.07AXZPP6264B1ZY (Delhi), since 2017. The applicant has been submitting GST returns in the timely manner with the Respondent Authority by clearly stating all the details with respect to the Sales, Purchase, etc., of the goods substantiated with the relevant documents. 2.5 It has been further submitted that on the basis of the details provided in the GST returns, the proprietorship of applicant has been availing Input Tax Credit (ITC) with the approval and proper assessment by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntations on the part of the applicant, and all the transactions are genuine and legitimate. All the invoices raised by the applicant are original and only against the delivery and supply of goods from various suppliers of the proprietorship of the applicant. 2.8 The applicant has been falsely implicated for the misdeeds and fraudulent acts of some other persons/enterprises. None of the transactions and invoices raised by the applicant are bogus or fake. The proprietorship of the applicant has been operating since 20 years and remains in compliance of all laws applicable upon it. The act of Respondent Authority is nothing but an abuse of their power bestowed upon them by the statue, i.e. GST Act. The presence of applicant is worldwide with the top brands of the world and thus stating that the transactions of applicant is bogus and fake is frivolous and just for the sake of implicating the applicant with the main person who defrauded the government exchequer. The applicant is an honest person and has become the prey of the fraudulent acts of some other person and the powers of the Respondent Authority and is seeking bail from this Hon'ble court on the following grounds : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia (12.04.2021), Calcutta High Court. (f) Because the arrest is hampering the business and goodwill of the applicant. The proprietorship of the Applicant /Accused is a well-established business not only in India but also globally. The applicant holds tie up and networks with big brands such as Pepsico, Nestle, etc. and the arrest of the applicant is causing great loss to the applicant. (g) Because the applicant holds valid registrations under various law applicable upon the proprietorship, with proper and existing offices at Delhi and Gurugram. The applicant deals with multinational companies across the world thus the question of committing any of the offence as alleged against the applicant cannot arise. (h) Because the Respondent Authority after proper scrutiny granted the refund of Rs.3,80,36,396/- for the Period April, 2022, due to payment of GST in excess of the actual liability, by the applicant and now even without proper assessment, arrested the applicant alleging the applicant of committing offences U/s 132 of The GST Act, 2017 for availing input Tax credit to the tune of Rs. 5,64,79,334/-. (i) Because there is a clear abuse of power by the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of commission of an offence made against a person. It would be prudent for the authority in the interest of protection of the constitutional rights of a citizen and perhaps in his own interest that no arrest should be made without a reasonable satisfaction reached after some investigation as to the genuineness and bona fides of a complaint and a reasonable belief both as to the person's complicity and even so as to the need to effect arrest. Denying a person of his liberty is a serious matter. A person is not liable to arrest merely on the suspicion of complicity in an offence. There must be some reasonable justification in the opinion of the authority effecting the arrest that such arrest is necessary and justified. ( See Joginder Kumar v. State of U.P. (1994 AIR 1349). (j) Because there are catena of Judgments where bail has been granted to Accused assessee involving dispute amount of more than 100 crores. (k) Because the That the offences under section 132(1)(b) (c) are compoundable on payment of the taxes by the tax evaders with the Commissioner, hence the gravity of offence is less, which makes the present case fit to grant bail. (l) That in H.B. Chaturved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the applicant being fake and dubious is false and frivolous. It is pertinent to mention here that the business of the applicant is spread globally and that too with the top brands of the world and on regular basis, huge orders are placed with the clients of the applicant. All the transactions such as export, invoices, etc., relate to genuine transactions and none of them is bogus or fake. The same can further be substantiated by the Refund granted by the department of GST, to the applicant. (o) Because under the garb of present case, the respondent authority has seized near about Rs.3.80 Crores of refund of the applicant. (p) That, all the evidence is documentary evidence, which is already in the custody of respondent authority; hence, there is no chance to temper with the prosecution evidence. (q) That the applicant had never involved in any offence ever before nor had any previous antecedent thereof nor the applicant is previous convicted. (r) That the Applicant is ready and willing to cooperate and shall appear in the Court or before the police as and when required. The Applicant further undertakes to abide by any condition that this Hon'ble Court de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -C Sr.No. GSTN Trade Name Legal Name Taxable Value in INR Tax in INR 1. 06FHLPS2390A1ZA M/s Guddu Traders Guddu Kumar Singh 16,24,46,800/- 4,38,49,620/- 2. 06CHUPA8724Q1ZJ M/s India Timber Mart Hariom Daya Shankar Agrahari 16,24,46,800/- 4,38,49,620/- 3. 06DHQPP1564J1ZG M/s Pratap Enterprise Ajay Pratap 16,96,97,500/- 3,78,35,800/- 4. 06AXZPP6264B1Z0 M/s Urneed Online Retail Durga Madhab Panda 33,18,63,950/- 5,64,79,334/- TOTAL 82,64,55,050/- 18,20,14,374/- 3.1 The chain mentioned hereinabove stands established on the verifying the same from the GST Portal. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e informed that he was not in touch with Durga Madhab Panda. The aforementioned search and the information received from the owner of the aforementioned premises were evident enough to conclude that M/s Urneed Online Retails was a fake/non-existent firm. 3.7 That subsequently during investigation of the case, accused was summoned on 06.05.2022 wherein Durga Madhab Panda tendered his voluntary statement wherein he admitted his involvement in the present crime besides other facts. 3.8 Further it was revealed that M/s Urneed Online Retails (Table-C) has falsely and intentionally shown that it has exported goods which involves GST rate @ 28% 18%. However, on a perusal/scrutinizing the GSTR-2A M/s Urneed Online Retails has been purchasing goods which involved duty @ 18%, 12% and 5% only. Hence M/s Urneed Online Retails through Durga Madhab Panda has been falsely declaring that it has been exporting goods involves GST rate @ 28% 18% with an intention to avail ITC at a higher rate. 3.9 Further it has been further submitted that during the course of investigation all the firms mentioned in the tables here in above were found to be bogus/non existence. 3.10 Since from the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2013 as disclosed by the accused/applicant vide his statement u/s 70 of the CGST Act, 2017 dated 19.05.2022. It is pertinent to mention here that the applicant has not supplied the annexures along with the bail application therefore no submission can be made on the profile of proprietorship of the accused/applicant and the prosecution seeks liberty of this Court to respond to the same as and when the annexures are provided to the prosecution. 3.16 That the contents of paragraph III of the bail application have been stated to be wrong and denied. In this regard, it has been submitted that the registration of the petitioner firm under GST has been cancelled w.e.f. 06.05.2022 due to it being non-existent/non-operational at the registered principal place of business. It is pertinent to mention here that the applicant has not supplied the annexures along with the bail application therefore no submission can be made in this regard and the prosecution seeks liberty of this Court to respond to the same as and when the annexures are provided to the prosecution. 3.17 The contents of paragraph IV of the bail application are wrong and denied. In this regard, it is submitted that M/s Ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a admitted his involvement in the present crime. Since from the investigation, the accused found to have been involved in causing loss to Government Exchequer to the tune of Rs. 5,64,79,334/- and thus has committed offence under section 16(2)(b) of the CGST Act, 2017 read with Section 132(1) of the CGST Act, 2017 which is punishable under Section 132(1)(i) of the CGST Act, 2017, therefore he was arrested in the office of Central Goods and Service Tax Commissionerate, Gurugram. 3.20 The contents of paragraph VIII of the bail application are a matter of record as per the remand application. However, it is submitted that during investigation, it was found after inspection/inquiry that there were three firms M/s Umeed online Retail (Delhi). M/s RGVS Gezellig Pvt. (Delhi) And M/s RGVS GezelligPvt. (Haryana) which were found non-existing and non-operational from which M/s Urneed online Retail (Haryana) has taken fraudulent Input Tax Credit amounting to Rs. 5,18,80,988/-. It is further submitted that the applicant has himself admitted in his voluntary statement u/s 70 of CGST Act that he also availed fake Input Tax Credit on the basis of bogus invoices issued by M/s Mahto Enterprises. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his voluntary statement u/s 70 of the CGST Act on 06.05.2022. It is reiterated that presently the investigation is at nascent stage if concession Bail granted the accused herein there reasonable that he try hamper the investigation/destroy evidence which seriously prejudice the case of the prosecution also belief that the accused flight risk. 3.25 It has been further submitted that in judgment C. Pradeep Vs. Commissioner of GST and Central Excise, Salem Anr. 2019 SCC OnLine SC 1942, is not applicable in the facts and circumstances of present case as the accused already been arrested in the present matter and currently judicial custody. Further reliance is placed upon the judgment the Hon'ble Court of India in the matter of Sandeep Goyal Union of India SLP (Crl.) No. 1803/2020 order dated 17.04.2020 where inter alia has been held that the accused under GST Act shall only be released once the investigation complete. 3.26 It has been further submitted that the offences under Section 132(1)(b)(c) are cognizable and non-bailable under Section 132(5), Various High Courts in their judgements denied the bail for offences committed under these Sections. Reliance has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act has himself admitted that he has availed Input Tax Credit on the basis of goods-less invoices issued by M/s Mahto Enterprises. Thus, the Input Tax Credit of Rs. 11,29,58,668/- availed by the applicant/accused is inadmissible to him. The accused utilized the fraudulently availed Input Tax Credit to the tune of Rs.3,68,19,876/- to set-off his GST liability on his outward supplies made in the month of March April, 2022 and filed for the refund of Input Tax Credit of Rs.3,46,10,000/- Rs.3,80,69,396/- for the month of March April, 2022 respectively. 4.2 The accused availed Input Tax Credit of Rs.5,18,80,988/- on the basis of the invoices issued by M/s Urneed Online Retail having GSTIN 07AXZPP6264B1ZY and M/s RGVS Gezellig Pvt. Ltd. having GSTIN 06AAHCR1597B1ZG 07AAHCR1597B1ZE, which were also found non-existent at their registered principal place of business during the investigation. Thus, the accused fraudulently availed Input Tax Credit of Rs. 5,18,80,988/- on the invoices issued by these firms, which was also inadmissible to him. 4.2 It has been further specifically submitted that M/s Urneed Online Retail having GSTIN 07AXZPP6264B1ZY and M/s RGVS Gezellig Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used Durga Madhab Panda may be dismissed, in the interest of justice. (Arguments) 5. Both the parties have argued in the line of their written submissions. (Findings) 6. After hearing both the parties and gone through the case file very carefully, this court would like to observe that the allegations against the applicant is under Section 132(1)(c) (e) r/w 16(2)(b) of the CGST Act, 2017. In order to proceed further, it would be relevant to see what Section 132 of CGST Act, 2017 postulates : 132. Punishment for certain offences. (1) Whoever commits any of the following offences, namely : (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax; (c) avails input tax credit using such invoice or bill referred to in clause (b); (d) collects any amount as tax but fails to pay the same to the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a term which may extend to one year and with fine: (iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j). he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. (2) Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine. (3) The imprisonment referred to in clauses (i), (ii) and (iii) of subsection (1) and subsection (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, be for a term not less than six months. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, except the offences referred to in sub section (5) shall be non-cognizable and bailable. (5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that subsection s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. Apart from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. Ends of justice are not satisfied only when the accused in a criminal case is acquitted. The Community acting through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the court in the discharge of its judicial functions. The Community or the State is not a personnongrata whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and National Interest, as was aptly stated in State of Gujarat v. Mohanlal Jitamalji Porwal and Anr., AIR (1987) 1321) Unfortunately in the last few years, the country has seen an alarming rise in whitecollar crimes which has affected the fibre of the country's economic structure. These cases are nothing but private gain at the cost of public, and lead to economic disaster. 9. Further, in case of Prahlad Singh Bhati Vs. NCT of Delhi 2001 AIR SCW 1266, the Apex Court has observed as under : The jurisdiction to grant bail has to be exercised on the basis of well settled principles having regard to the circumstances of each case and not in an arbitrary manner. While granting the bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character, behaviour, means and standing of the applicant, circumstances which are peculiar to the applicant, reasonable possibility of securing the presence of the applicant at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public or State and similar other consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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