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TMI Blog2024 (3) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion based on the documents presented by the Prosecution, considering it as one of the reasons for denying the Order for police custody. The learned Magistrate has additionally considered the remarks provided in the remand report, which highlight that the Directorate General of Goods and Services Tax Intelligence (DGGI) had previously investigated the submission of counterfeit invoice bills by the shell companies associated with the firm. These entities purportedly claimed to be engaged in development activities in the Amaravati region, although no actual work transpired. Consequently, the DGGI recommended a penalty of Rs. 16 crores against A.1's company under the Central Goods and Services Tax Act, 2017. This indicates that the DGGI, Hyderabad, has already undertaken a significant portion of the investigation. It is also observed in the report that after verifying all the existing records available with ADCL, the payment was released to the extent of work done after following the due procedure of the Department and per the terms and conditions of the agreement and after due certification by PMC M/s. LEA Associates South Asia Private Limited, at every stage, as mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the Defacto Complainant, i.e. Deputy Director of Revenue Intelligence, A.P., Vijayawada, a case has been registered for the offences under Sections 420, 409, 467, 471, 477(A), 120(B) r/w. 34 IPC. Later, A.1 was produced by the S.H.O., Machavaram Police Station, before the learned Magistrate on 29.02.2024; after that, he was remanded to judicial custody. (ii) While A.1 was acting as Additional Director of M/s. Avexa Company, a subcontractor, an amount of Rs. 50,00,000/- was transferred from M/s. BSR Infra Tech, who was an original contractor to the Government illegally on 31.01.2020. Abusing the position and influence of his father, A.1 entered into a conspiracy with the companies with a common intention of misappropriating funds which were entrusted to carry out the earmarked work contracts at Amaravati region, created false documents as if certain supplies or services were rendered by filing false invoices without actually doing no such work and diverted huge Government amounts to the companies by using false documents as genuine and by creating false GST accounts and claimed Input Tax Credit to a tune of Rs. 8,00,00,000/-. As such, it is necessary to order the Police custod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input tax credit by the AVEXA company and issued a show cause notice for the payment of Rs. 16/- crores as a penalty under section 74(1) of the provisions of the CGST Act, 2017; the investigation done by DGGI, Hyderabad unit established that M/s. Avexa company is in conspiracy with shell companies, created fake invoices, and committed misappropriation of tax amount to Rs. 16,06,78,558/-. 9. The Hon'ble Supreme Court, while considering the grant of custody to the police in a criminal investigation under section 167 (2) of Cr.P.C, in Satyajit Ballubhai Desai v. State Of Gujarat (2014) 14 SCC 434, at paragraphs Nos. 9, 16 and 19 had held as follows: 9. Having considered and deliberated over the issue involved herein in the light of the legal position and existing facts of the case, we find substance in the plea raised on behalf of the appellants that the grant of an order for police remand should be an exception and not a rule and for that the investigating agency is required to make out a strong case and must satisfy the learned Magistrate that without the police custody, it would be impossible for the police authorities to undertake further investigation and only in that event p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward bills/invoices without receipt of Goods/Services from them. 12. It is not in dispute that Avexa has received a work order regarding the investigation design and construction of roads and utilities in the green buffer of N6 road in Amaravati capital city from M/s. Jakson Eminence for values of Rs. 19,49,94,000/- and Rs. 35,85,95,506/- dated 28.02.2019, the above-said work was claimed to have been sub-contracted by Avexa to M/s. Tanisha Infra X-Zone Private Limited, M/s. Rollon Projects, M/s. Annai Infra Developers Limited and M/s. Allways Town Planners Private Limited. 13. The learned Special Public Prosecutor further contends that Avexa had diverted huge public money, i.e., Rs.17,85,61,864/- from the M/s. Aditya Enterprises, M/s. Sanjay Kumar Bhatia, M/s. Tanishq Steels Limited and M/s. Mount Business Build Private Limited: several sub-contracts were entered into without the permission of Amaravati Development Corporation Limited (ADCL), a Government body; the subcontract between BSR and Avexa does not have prior approval of the authority mentioned above, violating the terms of the contract, there were invoices issued and transfer of funds were carried out by the Respondent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relying on section 137 of the Act, Offences by companies.- (1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. (3) Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that offence and shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by the Special Commissioner of APSDRI, Vijayawada, to the Special Chief Secretary, Finance (DP-I) Department. The Special Commissioner requested the forwarding of the letter to the Special Chief Secretary, MA U.D., for further action. In response, the Commissioner of APCRDA constituted a committee comprised of Chief Engineers from APCRDA/ADCL through Rc. No. 23/24-Estt., dated 08.02.2024, to investigate the purported diversion of funds by M/s. Avexa Corporation Private Limited. The committee members include: (i) Sri N.V.R.K. Prasad, Chief Engineer, H B (ii) Sri P. Siva Prasada Raju, SE/Chief Engineer (FAC) (iii) Sri G.V. Pallam Raju, SE/Chief Engineer (FAC), T T 22. It is observed in the report that as per note of APSDRI/DGGI, dated 06.07.2023, in Para (11), the main allegation of diversion of public funds by M/s. Avexa Corporation Private Limited, Vizianagaram, A.P., to the extent of Rs. 45.37 Crores, is resorting to inward and outward bill trading. After having examined all the available records with ADCL (Amaravati Development Corporation, Vijayawada), it is concluded that there is no agreement between ADCL and M/s. Avexa Corporation Private Limited, the total mobilization ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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