Tarun Jain Vs Directorate General of GST Intelligence DGGI (Delhi High Court)
Conclusion: Anticipatory bail was granted to a person accused of fraudulently availing and passing on fake Input Tax Credit (ITC) worth Rs. 72 Crores with some stringent conditions in view of the prior conduct of assessee.
Held: In the present case, assessee had been accused of wrongfully utilizing the Input Tax Credit amounting to Rs. 72 Crores, an offence under Section 132(b) and (c). The Department had alleged that the Company made most of its purchases from three firms which further purchased from that firms which had been found to be non-existent at their official addresses and had no inward supplies. It was held that since the alleged amount exceeded five hundred lakhs, the accused can be punished with a maximum of five year of imprisonment and with fine. It is equally important to highlight that the offences under the Act are bailable and non-cognizable except for the offence under Section 132(5) of the Act. The task before High Court was two-fold, first being to ensure that no unwarranted abuse of process was allowed to impinge upon life and liberty of assessee, and second to ensure that the investigation was not hampered, procedure of administration of justice was not adversely impacted and ultimately the guilty was prosecuted. These were competing interests included in an anticipatory bail application i.e., the liberty of the accused and the interest of the investigative authorities for discovering the particular of offence. Custodial interrogation in the instant matter was neither warranted nor provided for by the statute. Detaining assessee in Judicial Custody would serve no purpose rather would adversely impact the business of assessee. The apprehension of arrest of assessee was also not bereft of factual evidence. It was this apprehension that forced him to make a request to the authorities concerned for recording the statement in the presence of the counsel and to apply for the grant of anticipatory bail in the Sessions Court, which was refused. In view of these facts and circumstances and in light of the provisions of law, this Court was inclined to allow the anticipatory bail application with some stringent conditions in view of the prior conduct of assessee. This Court allowed the instant application under section 438 of Code of Criminal Procedure. In the event of arrest, assessee be released on bail on his furnishing a personal bond in the sum of Rs. 5,00,000/-(Rupees Five Lakhs only) with two solvent sureties of like amount to the satisfaction of the Investigating Officer/Apprehending Authority with the prescribed terms and conditions.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
The petitioner has approached this Court by way of the instant application under Section 438 of the Criminal Procedure Code, 1973 (hereinafter referred to as “Code”) seeking anticipatory bail in a matter pertaining to Section 132 of the Central Goods and Services Act, 2017 (hereafter referred to as the “CGST Act”) in File Number DZU/INV/A/GST/894/2021. Another Application bearing CRL. M.A. – 16552/2021 has also been filed before this Court under Section 438 read with Section 482 of the Code seeking ad-interim protection from coercive action that might be taken by the Respondent during the pendency of the Anticipatory Bail Application.
2. Before adverting to the submissions made by learned counsel for the parties, it is essential to highlight the factual background of the matter.
FACTUAL MATRIX
3. The petitioner is one of the directors in M/S Jetibai Grandsons Services India Pvt. Ltd (hereinafter, referred to as “Company”), a company incorporated in August 2019. The company was initially involved in the supply of services however, it subsequently started manufacturing and supplying solar inverters, solar power generating units and like products.
4. The respondent has alleged that the Company of which the petitioner is a director, along with other firms namely M/s Microlyte Energy (P) Limited, M/s Sun Automation Limited, M/s Urja Global Limited and M/s NYX Industry India (P) Ltd. are involved in fraudulently availing and passing on ineligible/fake Input Tax Credit amounting to Rs. 72,00,00,000/- (Rupees Seventy Two Crores).
5. The respondent has alleged that the Company made most of its purchases from three firms namely – M/s Microlyte Energy (P) Limited, M/s Sun Automation Limited, and M/s Urja Global Limited. It has been alleged that these three firms further received these goods from various firms, most of which have been found to be non-existent at their official addresses and had no inward supplies. The respondent has thus alleged that these firms have availed the ineligible Input Tax Credit amounting to Rs. 72,00,00,000/- (Rupees Seventy-Two Crores) and fraudulently passed on the same to the Company within a short span of five months from November 2020 to March 2021.
