Vineet Jain Vs Union of India (Rajasthan High Court)
Rajasthan High Court has denied bail to Vineet Jain, who was arrested for allegedly availing Input Tax Credit (ITC) worth ₹10.87 crores using fake invoices and manipulated transport documents. The petitioner argued that his arrest was unlawful, citing the Supreme Court’s rulings in Prabir Purkayastha v. State (NCT of Delhi) and Pankaj Bansal v. Union of India, which mandate written reasons before an arrest under the Prevention of Money Laundering Act (PMLA). However, the court held that these precedents were inapplicable to GST-related arrests under Section 69(2) of the CGST Act, which does not require written reasons prior to arrest. The petitioner also contended that the suppliers from whom he received scrap were registered on the GST portal, and no action was taken against them. Additionally, he claimed his statement under Section 70 was recorded under coercion, making it inadmissible.
The CGST department opposed the bail, presenting evidence that the petitioner fraudulently claimed ITC without actual receipt of goods. Investigations revealed that the firms supplying the scrap were non-existent, and transport documents, including E-Way bills, were forged. A transport company owner confirmed that his truck never carried the alleged scrap, and fake rubber stamps were seized from the petitioner. The court emphasized that economic offenses must be dealt with strictly, citing S. Jaganmohan Reddy v. CBI, and ruled that the petitioner’s fraudulent activities had caused a significant revenue loss to the government. Given the severity of the allegations and evidence of deliberate fraud, the court dismissed the bail plea, reinforcing strict enforcement against ITC fraud under GST laws.
