Jatinder Kumar Vs State of Punjab and others (Punjab and Haryana High Court)
The Punjab and Haryana High Court, in the case of Jatinder Kumar Vs State of Punjab and others, rejected an application for pre-arrest bail filed by the petitioner, Jatinder Kumar, in connection with summons issued under Section 70 of the CGST Act, 2017. The petitioner was investigated for his alleged role in a scheme involving the operation of a fictitious firm and the fraudulent availing and passing on of fake Input Tax Credit (ITC), leading to a substantial loss to the public exchequer.
The allegations originated from an investigation into M/s Sona Casting Private Limited, which was found to have fraudulently availed ITC worth crores from non-operational or fictitious suppliers. The petitioner’s firm, M/s Manvi Steels, was identified as a major supplier that passed on fake ITC amounting to crores to M/s Sona.
Allegations of Fraud and Fictitious Firm
Detailed investigation by the revenue authorities uncovered serious accusations against the petitioner, Jatinder Kumar, proprietor of M/s Manvi Steels:
- Fictitious Firm: The registered address of M/s Manvi Steels was found to be fake, and the firm was determined to be non-existent. A site visit found the business premises almost vacant with no relevant documents.
- Fraudulent ITC: The firm was alleged to have availed fraudulent ITC totaling over crores and passed on fake ITC, resulting in a total GST loss of crores on a taxable value of crores. A significant portion of the ITC was sourced from suppliers whose registrations were either suo-moto cancelled or suspended by jurisdictional authorities due to being non-existent or bogus.
- False Documentation and Transactions: An analysis of e-way bills showed a lack of toll movement records for vehicles purportedly transporting goods from places like Solan, Himachal Pradesh, to Mandi Gobindgarh. This indicated that there was no actual movement of goods, and the transactions were paper-only.
- Bank Account Irregularities: The petitioner was found to have provided wrong account numbers for some suppliers on the GST portal. Furthermore, the firm was shown to have rotated money between bank accounts without any discernible profit or margin, allegedly to evade tax.
Petitioner’s Defense and Court’s Finding
