Case Law Details
Manoj Kumar Garg Vs State (Meerut District Court)
The statement of accused was recorded and the accused in his statement has admitted that no goods were received by his firm at his registered address from his suppliers and he claimed fake ITC on behalf of these fake firms. During investigation, the fifteen companies are found to be fake and the record of these firms and the E-way bill are filed with photographs of the person which are found to be non-existent and even the premises of M/S Lotus Enterprises are not to be found on the address and on verification it was found that the address shown in the firm detail has never been running on the address and Mr. Omveer Singh was stated to be died on 31-07-2017, the death certificate and the panchnama of the company is also filed by the department and another panchnama of fake companies without doing any transactions with the firms. The fake ITC amount of 26.46 crores is so much value for the nation and the accused seems to have committed an economic offence which ultimately affects the entire economy. the investigation in the matter is still under progress and the department has tried to interrogate the accused during investigation after taking permission from the court but the accused on his health ground refused for being interrogate. As far as the argument of jurisdiction of the case and the nature of punishment of the offence is concerned, it is transpired that the department after getting the information that the accused firm is involved in supply of goods in UP and on the basis of the notification of the department as produced before this Court seems to have power to investigate the present case and since the offence relates to tax evasion and fall under the economic offence which does not of offence punishable upto 5 years imprisonment and such type of offences should not be considered liberally particularly in the manner in which the offence is alleged to have been committed by the accused and if in such type of offences accused is granted bail, there is every livelihood that the investigation of the case will be hampered and as such I do not find it to be a case for bail.
FULL TEXT OF THE JUDGMENT/ORDER OF MEERUT HIGH COURT
This Bail Application has been presented by applicant/accused Manoj Kumar Garg, R/o C-84A, First floor, Front side, Harinagar Clock Tower, Harinagar Delhi-110064 to be released on bail under Section 132(1) (c) and 132 (1) (i) of Central Goods and Service Tax Act in Case No. 88/2020 in Police Station Additional Directorate General, DGGI, GST, Ghaziabad Regional Unit, Meerut Zonal Unit, Uttar Pradesh.
The brief facts of the matter are that the intelligence Officer DGGI Ghaziabad Shri Aishwarya Attrey conducted the search in the Premises of M/s ARJ Axim India at D-100 first floor, Mayapuri Phase IInd, Delhi on 29-12-2020 in the presence of witnesses Shri Ranjeet Mehto and Shri Rajkumar on the basis of search authorization letter dated 28-12-2020 given by the joined director DGGI Meerut Zonal Unit and a Panchnama was Prepared in the presence of Uday Shankar Dev, the employee of M/s ARJ Axim India and purchase invoices of different periods relating to the companies to whom the supply has been shown were seized and it was found that the accused has claimed false input tax credit on the basis of false sales invoices relating to fifteen companies of various names including lakshya Enterprises, Mahadev Enterprises, Zoombish, Retail Pvt. Ltd. Govindram Mittal & Company, NK Enterprises, Haryana Oversieze, Agrawal Garments, Raghuram Enterprises, Seven Seize Traders, Shubham Trading Company, HS traders, Lotus Enterprises, Indian International, Rhim Retail Services Pvt. Ltd. and SLG India Ltd. to the tune of Rs. 26,45,20,975/- and on the basisi of this fake Input Tax Credit, was arrested in the present case.
As per the case and claim of the prosecution, the applicant in his statement dated 17-02-2021 and 18-02-2021 is said to have admitted his involvement in the said offences of tax evasion and in since his statement is admissible as per the provision of CGST Act, therefore he was arrested in this case and presently he is in custody.
The facts and grounds taken in the bail application are that the applicant/accused is innocent and is a law abiding citizen in India who carries on his business in the name and style of M/s ARJ Axim India and the firm of the accused was established in 2001 and the accused was summoned as witness in an enquiry and later on has been falsely implicated in the present case. The search which is shown to be conducted on 29-12-2020 at the premises of accused is not as per procedure and the witness who are shown to be present at the spot were threatened by the investigating agency and put them under duress, threat and coercion and their statements are not at all free and independent. various document have been seized on the premises of the accused, the detail 0f which has not been given to the accused. The statement of the accused recorded by the Investigating Officer is not at all admissible in evidence as the same has been recorded and written by the Investigating Officer himself. Even the time of recording of statement and arrest is not the time on which a law abiding citizen is to be called and interrogated and no legal procedure has been followed by the Investigating Officer. It is also stated in the application that word Investigating Officer. It is also stated in the application that the word ”Reason to believe” mentioned in Section 69(1) of CGST Act is the sine qua non for arrest which has not been shown by the arresting Officer. Even otherwise the court at Meerut has no jurisdiction to remand the accused s no transaction has been taken place in the State of Uttar Pradesh and without jurisdiction the accused has been sent to jail for which the accused will take appropriate remedy and the investigation is an on-going process and the amount of the alleged evaded ITC credit can be determined after the adjudication as per the due process of law and the offence which is alleged to have been committed by the accused is an offence punishable with imprisonment of five years or fine with both and s triable by magistrate and in various cases, the Hon’ble Supreme Court and the Hon’ble High Court have propounded the principle that bail is a rule and jail is an exception and since the freedom of the accused have been curtailed by the wrong arrest of the accused, he be released on bail in the light of the direction given by the Hon’ble Supreme Court and on the basis of these grounds and argument advance in support of them it is prayed that the accused be released on bail.
From the prosecution side, Ld. Spl. P.P has filed detailed parawaise reply of the bail application of the accused and has also filed the entire record which was collected prior to arrest of the accused and during search and arrest of the accused and on the basis of entire record it is argued by the in the name of fake invoices of fifteen firms without supplying the goods It is also argued by the Ld. Spl. P.P. that the accused in his statement which is admissible in evidence as per the provision of the Act, has admitted the commission of the offence and documents collected by the prosecution fully corroborate the version of the statement of accused and since the offence is an economic offence as such the accused is not entitled for bail and his bail application is liable to be rejected.
The Ld. Defence counsel in rebuttal to the arguments advance by the Ld. Spl. P.P. have submitted that the firm of the accused is a registered firm and has been dealing in readymade garments and exporting the garments and regularly paying the tax and the companies which are shown to be fake the department has neither followed the procedure established by the law nor have any evidence for involvement of accused in the offence and offence is triable by first class magistrate which is punishable for imprisonment up to five years or fine as per established law of the Hon’ble Supreme Court a lenient view is to be taken in respect of such offences and accused should not be arrested ordinarily in a routine manner in such type of offences. In support of his argument, the Ld./ Defence counsel has filed various case law of Hon’ble Supreme Court and High Court and particularly relied on Arnesh Kumar Vs State of Bihar (2014) 8 SSC 273 and recent case law of Hon’ble High Court of Bombay namely Daulat Samirmal ehta Vs Union of India (2021) SSC Bombay 200, and on the basis of his argument and case laws has prayed for enlargement of accused on bail.
I have heard the Ld. counsel of both the parties at length and have gone through the entire record and perused the case law referred by both the Ld. counsels.
From the perusal of the record, it is transpired that before raiding the premises of the accused the department has initiated the proceeding on 24-12-2020 and the suppliers of the accused firm were physically verified and after verification and perusal of the record on 17/18-02-2021 and the evidence collected by the department was shown to the accused and it was found that accused through his firm has availed 26.46 crores Input Tax Credit receipt of goods or services from the non-existent fake firms. The statement of accused was recorded and the accused in his statement has admitted that no goods were received by his firm at his registered address from his suppliers and he claimed fake ITC on behalf of these fake firms. During investigation, the fifteen companies are found to be fake and the record of these firms and the E-way bill are filed with photographs of the person which are found to be non-existent and even the premises of M/S Lotus Enterprises are not to be found on the address and on verification it was found that the address shown in the firm detail has never been running on the address and Mr. Omveer Singh was stated to be died on 31-07-2017, the death certificate and the panchnama of the company is also filed by the department and another panchnama of fake companies without doing any transactions with the firms. The fake ITC amount of 26.46 crores is so much value for the nation and the accused seems to have committed an economic offence which ultimately affects the entire economy. the investigation in the matter is still under progress and the department has tried to interrogate the accused during investigation after taking permission from the court but the accused on his health ground refused for being interrogate. As far as the argument of jurisdiction of the case and the nature of punishment of the offence is concerned, it is transpired that the department after getting the information that the accused firm is involved in supply of goods in UP and on the basis of the notification of the department as produced before this Court seems to have power to investigate the present case and since the offence relates to tax evasion and fall under the economic offence which does not of offence punishable upto 5 years imprisonment and such type of offences should not be considered liberally particularly in the manner in which the offence is alleged to have been committed by the accused and if in such type of offences accused is granted bail, there is every livelihood that the investigation of the case will be hampered and as such I do not find it to be a case for bail. The other arguments which are taken on behalf of the accused are mostly related to the defense level and can be given at this stage of trial and no benefit of any irregularity or omission can be given at this stage. In the entire facts and circumstances of the case, I do not find it to be a fit case for bail and hence the bail application is liable to be rejected.
ORDER
The bail application of the accused Manoj Kumar Garg is accordingly rejected.
