Dharmesh Kirtikumar Saha Vs Union of India (Gujarat High Court)
Facts:
Applicant has entered into a criminal conspiracy for creating fake purchases of 2 (two) firms with well organize bogus billing syndicate which resulted into monetary loss of the government exchequer to the turn of Rs 9.33 crores.
Applicant was served summon, however he didn’t not complied it. On 17.03.2022, the concerned authority visited the business place of applicant and made extensive search of the place and seized material reports/documents and record statements of the applicant and on the very next day dated 18.03.2022, he was arrested for the alleged offence as referred, and he was produced before the Additional Chief Metropolitan Magistrate, Ahmedabad.
The application was moved for the regular bail before the Court below, which have rejected the said application vide order dated 22.03.2022 and 05.04.2022 respectively.
The learned senior counsel on behalf of the applicant has submitted that the applicant has not committed any offence and has been falsely involved without any reasonable ground. Hence the arrest would only arise when proper investigation is completed and after filing of the complaint, whereas in the officers of the department, adeptly went to the business place of the applicant without any notice, and petitioner was arrested.
Learned Senior Counsel also submitted that during the investigation, the company made a payment of sum Rs.50 lacks through Form GST DRC 03.The applicant had assured the department that if at all, the ITC credit is not admissible, then ,company would reverse such ITC at this scenario, the applicant adhere to the assurance given in vide letter dated 29.12.2021.
Learned senior counsel further submitted that after the arrest of the applicant, the company made deposit of Rs.2 crores via Electronic Cash which is reflected in Form DRC-03, further the company reverses the ITC and made payment to the tune of Rs 40 Lakhs.
Learned senior counsel urged that there is no sufficient evidence to claim that the actual purchases including tax invoice were being effected and payment to the vendors were done through banking channels, therefore such transaction can be tracked on GST portal. Hence, no prim-facie case is made out for the alleged offence and unless and unless and until final adjudication is not made out, the arrest of applicant is arbitrary and illegitimate.
Under section 107(6) of the Act provides for deemed stay against the coercive recovery of dues of 10% of disputed tax liability. Hence in the present case, company already deposited more that the value i.e. 10% and therefore case is made out for exercising discretion enlarging the applicant on bail.
Lastly, it was submitted by learned senior counsel that the applicant doesn’t have any past criminal record and he belongs to respectable family and has holders social reputation too which in any circumstances doesn’t reflect that he has urged to flew from the society hence, entire case is based on the evidentiary evidence and when substantial investigation qua the application is over then further custody of the applicant is not necessary.
In view of the aforesaid contention, learned counsel submitted that discretion may kindly be exercised by applicant on bail.
Respondent No. 1 opposed the contentions raised on behalf of the learned senior counsel for the application and reiterating the facts of the affidavit filed by the officer of the Department, contended the evasion of duty is Rs. 9.33 crores and considering large conspiracy hatched by Mr. Bharat Soni and his associates and the applicant being a part of conspiracy.
On the issue of deposit of tax, made by the applicant, learned counsel submitted that reversal of ITC is not acceptable as amount is fraudulent in nature and have received from fake nonexistence firms hence, even after making such payment; the court has to consider intensity of offence committed and its social impact at large.
It was also submitted that offence alleged committed act in a planned manner with the objective to gain personal profit, regardless of the consequences on society.
Learned senior counsel submitted that matter is under investigation and there are missing link of chain which are yet to be joined hence applicant being the main person of the company, his custody is necessary and there is a chances of him to except from the justice and he may influence the witnesses as well.
It was submitted by the learned council that no case is made out for exercising of power to release the application on bail hence, the application may be rejected.
Issues:
The issue in the case is relate to availment of fraudulent credit and creating fake GST invoices in order to create transaction.
Responded No.1 raided the premises of one Bharat Bhagwandas Soni on the basis of generating fake GST invoices which were issued by Traders of Bullion and Diamond Products Without the supply of corresponding goods.
During the procedure of the search, it was revealed that the present applicant Dharmesh Shah being a Director of M/s. Dee Cubes Pvt. Ltd and Proprietor of M/s Gloriana Jewels having fake business place at Ahmedabad, has availed illegally ITC of Rs 7,80,80,991/- from non- existing fake firm named Vishnu Gold, Viram Jewelers, Neel Jewelers and Kabir Enterprise. One more firm also came onto picture namely M/s. Gloriana Jewels has also availed ineligible ITC of Rs. 1, 52, 30,495/- from the said firm. In brief the total ITC credit of Rs. 9.33 crores on the strength of invoice issues by 4(four) non-existence firms without receiving the goods which are illicit in nature has been credited. Thus, the offence committed under section 132(1) (c) of the said Act, hereby it was found out by the further investigation that the input test ITC was illegally passed by the applicant to other person by issuing invoice without the actual supply of goods which led to wrongful availment of ITC, offence under section 132(1) (d) of the Act.
Decision: High Court Held:
Keeping in view of the above facts and circumstances of the case the court held that the applicant is ordered to be released on regular bail, on executing a personal bond of Rs.10,000/- (Rupees Ten thousand only), with one surety of the like amount to the satisfaction of the learned Trial Court and subject to the conditions laid down below was following:
