Case Law Details
Naresh Mittal Vs. DGGST (Patiala High Court)
It appears from the facts that applicant alongwith Chhedi Lal Mittal created fake firms and availed fake ITC to the tune of Rs. 25 crore. Further it is brought to the fore that applicants firm could not have any business transactions with the firms he was transacting with as the businesses done by both were entirely different. Further these firms were engaged only for issuance of paper invoices without supply of any goods and accused in connivance of Chhedi Lal Mittal used to create fake bills of metals without actual supply of goods for passing of ineligible ITCs to various firms and was ultimate beneficiary of the amount passed through non existing firms to their firms. These facts taken in totality show that accused in a pre planned manner had created non existing firms to create invoices without actual supply of Goods for availing ineligible ITCs through them and through this he got illegally benefited to the tune of Rs. 25 crores in connivance with Chhedi Lai Mittal as such, this makes him ineligible for grant of bail at this stage because his release would certainly impact a fair investigation which is at a crucial stage at this juncture. The application is accordingly dismissed.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Proceedings conducted through video conferencing
It is submitted that applicant is dealing in sales and supply of rice and pulses since 2016 and during the course of the aforesaid business he started his proprietorship concerned named M/s Prag Enterprises formed for intra State sales and supply of unbranded rice acid pulses to various retailers and wholesalers. The firm is registered under GST Tax 2017 and as per Notification 2 of 2017 date 28,06.2017 issued by Central Government, no tax under GST is leviable on the supply of rice and pulses. The applicant has been regularly filing ‘Nil” GST returns which means that all outward and inward supply are Nil rated/exempted category. IT is submitted that applicant was never eligible for any t PC under IGST, CGST and SGST. It is submitted that respondent visited his office of M/s prag Enterprise and on the pretext of conducting search and thereafter he was arrested. It is submitted that conducting search and thereafter he was arrested, it is submitted that applicant was falsely implicated by the department and has been languishing In jail since 19411.2020.
Department has filed a written reply and it is submitted on behalf of department that investigation was carried out with respect to various fake firms who had passed on fake ITC running into cranes of rupees to various firms and white visits were conducted at their registered addresses these firms were not found in existence and fabricated documents such as electricity bills, fake rent agreements were uploaded on GST portal for obtaining registration and even bank accounts which were declared in the GST registration was found non existing or in other persons name. Thereafter, on detailed investigations these firms were found fake and it is revealed that they were engaged only into issuance of paper invoices Without supply of any goods and they were passing fake ITC and banking transactions revealed that MIS PC traders and
M/s Prag Enterprises were beneficiary through supply of fake invoices. It is submitted that the applicant in the guise of trading of rice and pulses in connivance with his brother Chhedi Lal Mittal have created fake firms and issued fake bills of metals without actual supply of goods thereby passing on ineligible ITCs to various firms which is evident from bank statements of M/s Prag Enterprises and M/s P.C. Traders. Also, it is submitted that MIS Tulsiyan Impex and M/s Super Tech were non existing firms and payments made in the account of M/s Tulsiyan Impex by its buyers were further transferred to the account of M/s Prag Enterprises and similarly payments intended to be made with respect to M/s Super Tech was actually going to the account of M/s Prag Enterprises transferring huge amounts without any business relationship between them. Similarly, huge amount was transferred from the account of M/s PC Traders from M/s Singhania Brothers. M/s Sunshine Traders. M/s Shree international, M/s Super Tech. It is submitted that the business profile of M/s Supertech and M/s Prag Enterprise is entirely different from each other and there could not have been any possible business transaction between the two. It is submitted that applicant with his brother collectively created four firms M/s Singhania Brothers, M/s Sunshine traders, M/s Shree international, M/s Super Tech. It is submitted that thes;firms have availed fake ITC to the tune of 26.26 crore and have passed on fake ITC to the tune of 25 crores. It is submitted that applicant is co-accused and his interrogation will be required for progress of the investigation as he himself is the creator of the fake firms with his brother and on his release he may tamper with the evidence.
Arguments heard. Record perused carefully.
It appears from the facts that applicant alongwith Chhedi Lal Mittal created fake firms and availed fake ITC to the tune of Rs. 25 crore. Further it is brought to the fore that applicants firm could not have any business transactions with the firms he was transacting with as the businesses done by both were entirely different. Further these firms were engaged only for issuance of paper invoices without supply of any goods and accused in connivance of Chhedi Lal Mittal used to create fake bills of metals without actual supply of goods for passing of ineligible ITCs to various firms and was ultimate beneficiary of the amount passed through non existing firms to their firms. These facts taken in totality show that accused in a pre planned manner had created non existing firms to create invoices without actual supply of Goods for availing ineligible ITCs through them and through this he got illegally benefited to the tune of Rs. 25 crores in connivance with Chhedi Lai Mittal as such, this makes him ineligible for grant of bail at this stage because his release would certainly impact a fair investigation which is at a crucial stage at this juncture. The application is accordingly dismissed.
Copy of the order be sent to ld. Counsel for applicant through email/whatsapp.
