Hema Garg and another Vs State of Haryana and another (Punjab & Haryana High Court)
It is submitted that in the instant case, the petitioners are praying for anticipatory bail, in response to the notices issued by the respondents-Department, just in the shape of demand in form GST DRC-01A with an advice to pay the amount of tax, as the petitioners have liability of paying tax of more than Rs.36.00 crores, which they are evading on the basis of certain fake documents. The petitioners have failed to appear before the authorities, which has issued the notices, as they are involved in availing and utilizing wrongful input tax credit on the strength of invoices and E-way bills, which are issued from the non-existent and suspicious firms and further passed on input tax credit to various taxpayers throughout the country, thereby causing huge loss to the State Exchequer.
For the reasons recorded above and finding no merit in both these petitions, same are dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB & HARYANA HIGH COURT
Prayer in both these petitions is for grant of anticipatory bail to petitioners Arpit Garg, Hema Garg and Vijay Garg, in the proceedings initiated by the respondents, in pursuance of the inspection conducted on 24.06.2021 and consequential summons issued by the respondents under Section 70 of HGST/CGST Act, 2017.
Learned counsel for the petitioners submits that in CRM-M-30676-2021, petitioner No.1 Hema Garg is registered proprietor of the firm Shree Shyam Traders, having principal place of business at Dharam Colony, Sector-5, Palam Vihar Road, Gurugram, whereas petitioner No.2 Vijay Garg is authorized person of the said firm, who was dealing in wholesale dealing of iron and steel products having GSTIN No.06AKQPA4209F1ZH, vide registration certificate dated 28.07.2018 and they have another firm by the same name bearing GSTIN No.06AEQPG6869P1ZH, vide registration certificate dated 23.01.2019.
In CRM-M-31591-2021, petitioner Arpit Garg is registered proprietor of the firm Stasya Enterprises, having principal place of business at Ground Floor, Shop No.1 and 2, Dharam Colony, Sector-5, Palam Vihar Road, Gurugram and his firm is dealing in wholesale trading of iron and steel products having GSTIN No.06BDLPG3178G2ZH, vide registration certificate dated 18.09.2018.
It is further stated that a team constituted by ETO, Haryana State GST Intelligence Unit raided shops of the petitioners on 24.06.2021 and after carrying the inspection, summons under Section 70 of HGST/CGST Act, 2017 were issued to appear before the concerned authority. Later on, accounts of petitioners Hema Garg and Vijay Garg, in Indian Bank and Punjab National Bank and petitioner Arpit Garg in Axis Bank, were frozen by the State Tax Unit, as provisional attachment order was passed. It is also submitted that the petitioners could not appear before the concerned authority, however, the reply was sent to extend the time.
Learned counsel for the petitioners further submits that during the analysis of inward supplies (purchases) of the firms, the petitioners have availed input tax credit on the strength of tax invoices issued from some suspicious firms of Delhi and the Department, on verification of E-way bills and invoices, has initiated the proceedings against the petitioners. It is also submitted that one of the ground for issuing the summons, is that on verification by the Department, of suspicious tax payers of Delhi, from whom the petitioners have shown the inward supplies (purchases) to their firms, were found to be non-existent and verification of some of the firms was pending. It is next submitted that the respondents have formed an opinion, after recording statements of the vehicle owners, that they have never transported the inward supplies from the firms of Delhi to firms of the petitioners, therefore, bogus documents are prepared by the petitioners.
Learned counsel for the petitioners has next argued that during pendency of the anticipatory bail before the Additional Sessions Judge, the respondents have filed the reply and in paras No.2 to 9 of the reply, it is stated as under: –
“2) That during the analysis of inward supplies (purchases) of the firms mentioned in the table below, it was observed that these taxpayers had availed the input tax credit (hereinafter referred to as ITC) on the strength of tax invoices issued from some suspicious firms of UT of Delhi.
