prpri No Bail to person accused of floating bogus firms in alleged GST Evasion case No Bail to person accused of floating bogus firms in alleged GST Evasion case

Case Law Details

Case Name : Director General of GST Intelligence Vs Vikas Jain (Rohtak District Court)
Appeal Number : BA No. 1506 of 2020
Date of Judgement/Order : 28/11/2020
Related Assessment Year :
Courts : District Court

Director General of GST Intelligence Vs Vikas Jain (Rohtak District Court)

 The allegations against the present applicant/accused are that he and co-accused Satender are the persons responsible for floating bogus firms in the name of various persons and he was involved in the issuing of invoice without the actual movement of the goods. These kind of transactions were carried out to earn commission and the investigation has pointed out that such transactions have caused loss to the tune of Rs. 13.08 crores to the Government exchequer. The contention of the applicant that there is nothing on record to show that he had received any kind of benefit from the alleged bogus firms is not sustainable for the simple reason that investigation is at initial stage and even then the investigation team has recovered fake transport-bilty books and the diary having cash entries in his hand writing. Admittedly, the offence alleged against the accused falls within the ambit of economic offence. The investigation is still pending and same is at initial stage. In this circumstances, this Court is of the opinion that granting concession of bail to the accused will prejudice the fair investigation. Further, the authorities relied on by the applicant are not squarely applicable to the facts in hand.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

It is the case that Proprietorship firms, namely, M/s Hanuman Enterprises, M/s Jai Bhagwati Sales, M/s Jagdamba Trading Company, M/s UT Overseas, M/s T.P. Impex, M/s Guru Nanak Enterprises and M/s Jayant Tranding Company were created with ulterior motive i.e. to issue fake invoices without supplying of goods and for earning illegal commission. In the investigation, it was found that these fake transactions caused loss to the tune of Rs. 13.08 crores to the Government exchequer. According to the complainant, present applicant is the proprietor of M/s Jai Bhagwati sales and he has connived with co-accused namely, Satender Kumar Singla to avail and pass Input Tax Credit fraudulently from the firm namely, M/s Hanuman Enterprises.

2. Applicant has contended that M/s Satender is the main accused and even as per the allegations of the complainant, no direct benefit has been availed by the applicant. He vehemently contended that as per the case of complainant, exact amount of loss has not been assessed. Nothing has been stated that how the applicant is connected to Hanuman Enterprises and there is a hypothetical calculation that the applicant has issued fake invoices without movement of goods involving GST of Rs. 5.12 crore only to make the offence cognizable and non bailable. He also argued that applicant/accused could not have been arrested as the offence alleged to have been committed is punishable upto five years and as per Section 41 of Cr.P.C., a person may be arrested if he is found to have committed offence punishable more than seven years. He further contended that in absence of any assessment order, applicant could not have been arrested. The learned counsel for applicant has relied on following case in support of his arguments:-

C. Pradeep Vs. The Commissioner of GST and Central Excise Selam, (SC) 2020 (77) GST 574

Akhil Krishan Maggu & Anr. v. Deputy Director, Directorate General of GST Intelligence, (Punjab and Haryana) (DB) 2020 (77) GST 279.

3. On the other hand, learned counsel for complainant has vehemently opposed the bail application and submitted that Section 132 of GST Act provides ‘whoever commits’ the offence of issuing any invoice or bill without supplying of goods or services or both in violation of the provisions of this Act is covered within the ambit of GST Act. He then submitted that it is not necessary that applicant/accused should be connected with Hanuman Enterprises and it is suffice that he issued fake invoices in the name of Hanuman Enterprises. He also argued that assessment is not the pre requisite to attract the Section 132 of GST Act. He also submitted that the bail application of co-accused has already been dismissed. The learned counsel for complainant has relied on following case in support of his arguments:-

Vimal Yashwant Giri Goswami Vs. State of Gujarat, C/SCA/13679/2019 At last, he prayed that present application deserves to be dismissed.

4. Arguments heard and record perused.

5. The allegations against the present applicant/accused are that he and co-accused Satender are the persons responsible for floating bogus firms in the name of various persons and he was involved in the issuing of invoice without the actual movement of the goods. These kind of transactions were carried out to earn commission and the investigation has pointed out that such transactions have caused loss to the tune of Rs. 13.08 crores to the Government exchequer. The contention of the applicant that there is nothing on record to show that he had received any kind of benefit from the alleged bogus firms is not sustainable for the simple reason that investigation is at initial stage and even then the investigation team has recovered fake transport-bilty books and the diary having cash entries in his hand writing. Admittedly, the offence alleged against the accused falls within the ambit of economic offence. The investigation is still pending and same is at initial stage. In this circumstances, this Court is of the opinion that granting concession of bail to the accused will prejudice the fair investigation. Further, the authorities relied on by the applicant are not squarely applicable to the facts in hand.

Accordingly, present application is hereby dismissed.

Let file be put up on the date fixed i.e. 08.12.2020.

Download Judgment/Order

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