Case Law Details
Gaurav Dhir Vs C.G.S.T. Gurugram (Anti Evasion) (Court of Addl. Sessions Judge, Gurugram)
Introduction:
The legal battle between Gaurav Dhir and CGST Gurugram unfolds as they face allegations related to fraudulent Input Tax Credit (ITC) claims under Sections 132(1)(i) r/w 132(1)(b)(c)(e)(f) of the CGST Act, 2017. This article delves into the intricacies of the case, including the accused’s arrest, the nature of offenses, and the arguments presented during the bail hearing.
Detailed Analysis:
The prosecution’s case revolves around the discovery of non-existent firms, Brista Fashion and Alexa Impecs Solutions, involved in accumulating fraudulent ITC through bogus invoices. Gaurav Dhir, a Chartered Accountant, and Sunil Mahlawat are accused of misusing their credentials to issue false CA certificates, facilitating fake refund claims. The prosecution contends that the accused orchestrated a scheme involving other economic offenders.
Gaurav Dhir’s defense asserts his innocence, claiming that he merely submitted and checked documents provided by the main accused for refund claims. The defense argues that the alleged forgery of the CA certificate is a matter between Dhir and Sunil, emphasizing Gaurav’s role as a professional consultant.
Sunil’s defense paints him as a young, diligent Chartered Accountant falsely implicated, highlighting his lack of involvement in filing refund claims. It is argued that Sunil provided his UDIN and OTP in good faith, unaware of Gaurav’s fraudulent activities. Both defenses challenge the severity of charges, pointing out bail provisions for certain CGST Act offenses.
The court, however, rejects the defenses, emphasizing the gravity of the offenses. It notes the systematic use of forged certificates by Gaurav Dhir and Sunil, considering the charges not only under CGST Act but also under IPC Sections 420/467/468/471. The court finds the accusations severe, warranting a firm approach due to the economic implications and potential threat to the financial health of the country.
Conclusion:
In a significant decision, the court denies bail to Gaurav Dhir and Sunil, citing the deep-rooted conspiracies, economic ramifications, and the ongoing investigation’s crucial stage. The judgment underscores the need for stringent measures in economic offenses, aligning with the Supreme Court’s stance on the seriousness of such crimes.
This case serves as a reminder of the complexities surrounding economic offenses and the legal scrutiny they undergo. As the legal proceedings unfold, the implications of this case on the interpretation of CGST Act provisions and professional misconduct in financial matters will be closely watched.
This order shall dispose of abovementioned two applications for regular bail filed on behalf of applicant-accused Gaurav Dhir and Sunil, in a Complaint case under Sections 132(1)(i) r/w 132(1)(b)(c)(e)(f) of CGST Act, 2017, Police Station CGST Office, Gurugram.
2. Notice of the application was given to the respondent, which filed its reply.
3. Brief facts of the case of the prosecution are that on inputs/intelligence developed by the officers of Anti Evasion, CGST, which revealed that some non-existent, bogus and non-operation firms namely M/s Brista Fashion and M/s Alexa Impecs Solutions were accumulating very high amount of fraudulent ITC on the basis of goods less and bogus purchase invoices from nonexistent and fraudulent firms and further showing sale invoices at lower tax rate and claiming inverted tax refund by filing and uploading fake documents including CA certificates. It was found that the same modus operandi was used by cartel of economic offenders in filing bogus applications for refund consisting of various fake/bogus firms. During the course of investigation two Charted Accounts namely Sunil Mahlawat and the Gaurav Dhir were found to be misusing their UDIN credentials and issuing false/forged CA certificate for the aforementioned firms to enable them to subsequently claim and avail bogus refunds. Accordingly, they were arrested. During the course of further investigation, two more persons namely Lalit Dogra and Sanjeev Sharma were also found to be involved in the present crime along with the abovementioned Charted Accountants in fraudulently availing inadmissible Input Tax Credit through the abovementioned fake/bogus firms and accordingly they were also arrested.
4. Learned counsel for applicant-accused Gaurav Dhir has argued that applicant-accused Gaurav Dhir has been falsely implicated in the present case and he has nothing to do with the fake and fraudulent firms of the other co-accused and he has only submitted and checked the documents as provided by the main accused and on the basis of these documents, he filed claim for refund and the details were already there in the portal of the respondent and the respondent are hiding inefficiency of their own officials who issued refund without checking the documents and he further added that the CA certificate alleged to be forged by applicant-accused Gaurav was not even required in the case in hand in the light of proviso to clause (m) of Rule 89 (1) and prima facie no case is made out against the applicant-accused nor any ground to arrest him since 132 (1)(e)(f) of the CGST Act are bailable offences and Section 132(1)(b) & Section 132(1)(c) of the Act are not even made out against the applicant-accused and the authorities have not followed the provisions of Section 69/132 of CGST Act while arresting the applicant-accused and the alleged refund was made by the authorities of the respondent after satisfaction of the concerned officer and the applicant-accused is a Charted Accountant by profession and he only compared the documents submitted by the main accused from the portal of CGST and he has only taken his professional fees i.e. Rs.10,000/- per case and even as per reply of the respondent, it is admitted that no part of the refund amount has come to the pocket of the applicant-accused. He further argued that the alleged allegation of forgery of CA certificate is between the applicants-accused Gaurav Dhir and Sunil and the same was not to commit any fraud with the respondent or to be part of any fake/fraudulent refund claims and like other professions i.e. Advocates, Doctors etc., the applicant-accused had only gone through the documents submitted by the main accused and he had no responsibility to check and verify these documents and it is for the concerned agencies to do so. It is further argued that the applicant-accused has made himself available at the first instance when he was asked to join the investigation and the present case is documentary in nature, which are already in the possession of the respondent department and there is no likelihood to influence the witnesses and custodial interrogation of the applicant-accused is not required. With these submissions, learned counsel prayed for granting bail to the applicant-accused Gaurav Dhir. In support of their arguments, learned counsel for the applicant-accused Gaurav has placed reliance upon the authorities cited as P. Chidambaram Vs. Directorate of Enforcement (2020) 13 Supreme Court Cases 791, Tarun Jain Vs. Directorate General of GST Intelligence DGGI, Bail Application no.3771/2021 and Crl.M.A.16552/2021, decided on 26.11.2021, Arnesh Kumar Vs. State of Bihar and another 2014(3) JCC 1529, Y.S.Jagan Mohan Reddy Vs. Central Bureau of Investigation (2013) 7 Supreme Court Cases 439, Paridhi Jain Vs. State, through PP, Bail Application No.742 of 2020, decided on 20.01.2020 (Rajasthan High Court) Shravan A. Mehra Vs. Superintendent of Central Tax, Anti-Evasion, GST Commissioner-ate Advocate, Criminal Petition No.979 of 2019 with Crl.P.No.980 of 2019, decided on 19.02.2019 (Karnataka High Court), Anuj Mahesh Gupta Vs. Assistant Commissioner of State Tax, GST Bhawan, Mumbai & Anr. Writ Petition (Stamp) No.4775 of 2021, decided on 9.3.2021(Bombay High Court), Arnab Manoranjan Goswami Vs. The State of Maharashtra & Ors, Criminal Appeal No.742 of 2020, decided on 27.11.2020, Makemytrip (India) Pvt. Ltd. Vs. Union of India & Ors.W.P.© 525/2016 & CM 2153/2016, decided on 1.9.2016, Union of India & Ors. Vs. M/s Make My Trip (India) Pvt. Ltd. Civil Appeal No.8080/2018, Sanjay Chandra Vs. Central Bureau of Investigation (2012) 1 Supreme Court Cases 40, Akhil Krishan Maggu Vs. Deputy Director, 2019 SCC OnLine (P&H) 5416 and Jayachandran Alloys Vs. Superintendent W.P. 5501 of 2019 (Madras HC).
5. Learned counsel for the applicant-accused Sunil has argued that the applicant-accused Sunil Mahlawat is a young man of 26 years and is a Chartered Accountant by profession, who is diligently doing his work. He further argued that the applicant-accused Sunil has been falsely implicated in this case and he has nothing to do with the filing of the refund claim and even co-accused Gaurav Dhir has given statement before the concerned agency that applicant-accused Sunil had no knowledge about filing of these refund claims and he only gave his UDIN for login to the concerned portal for issuance of certificate and also supplied OTP to the co-accused Gaurav in good faith and had no knowledge that co-accused Gaurav Dhir was using it for forgery of any certificate and he had no intention to benefit any of the accused in the present case. The applicant-accused has never been indulged in any kind of illegal activity. The applicant-accused never worked as CA for the alleged companies which have obtained the CA certificate from co-accused Gaurav Dhir. It is only co-accused Gaurav Dhir, who would have charged the fees from those companies and the applicant-accused Sunil did not receive even a single penny in this case. It is further argued that the alleged offences under Section 132(1)(e)(f) of CGST Act are bailable offences and Sections 132(1)(i) r/w 132(1)(b)(c) of CGST Act are not made out against the applicant-accused Sunil. It is further argued that the applicant-accused has made himself available at the first stance when he was asked to join the investigation. The present case is documentary in nature, which are already within the possession of the respondent department and there is no likelihood of influence the witnesses. Custodial interrogation of the applicant-accused is not required. With these submissions, learned counsel prayed for granting bail to the applicant-accused Sunil.
6. On the other hand, learned counsel for the respondent has argued that applicant-accused Gaurav prepared forged certificate and also forged signatures of the co-accused Sunil while filing the said CA certificate for claiming refund in respect of the Firms which were found to be fake and more than 200 e-way bills, invoices and the forged CA Certificates associated with various companies have been retrieved from laptop of the accused and the alleged misuse of UDIN was in the knowledge of the applicant-accused Sunil, who did not report the said illegal act either to CGST office or ICAI and hence, in the said manner, the accused persons have committed the said offences with the main accused and they are also involved in the other transactions of similar nature. It is further argued that the applicants-accused are deeply associated with a racket that files fake companies fraudulently claim ITC and claim refund of the same from the government, thereby defrauding the public exchequer and the offences against State committed by the applicants-accused are detrimental for the well-being of society. The said act of the applicants-accused also constitutes misconduct in terms of the Chartered Accountant Act,1949 as well is an offence under the CGST Act, 2017. It is further argued that the investigation of the case is at crucial stage and there is strong apprehension that the applicants-accused would destroy the evidence, manipulate witnesses, abscond and commit similar offences in case they are allowed to be released on bail and therefore, the present bail applications of the applicants-accused are liable to be dismissed.
7. I have heard the learned counsel for the parties and have gone through the case file very carefully.
8. In brief, the allegations against the applicant-accused Gaurav Dhir pertains to being instrumental in filing of refund claims on behalf of the Firms, which were later on found to be fake and non-existing and for the said purpose he also issued CA certificate by forging signatures of co-accused Sunil Mehlawat and uploaded the same for the purpose of facilitating the said refund. The allegations qua the applicant-accused Sunil pertains to giving his UDIN and password to the co-accused Gaurav Dhir and also sharing his OTP with him for the said purpose.
9. So far as the said CA certificate is concerned, there is no dispute with the fact that the same was issued by the applicant-accused Gaurav Dhir by forging signatures of co-accused Sunil. Even learned counsel for applicant-accused Sunil has alleged so and the said fact is not denied by learned counsel for the applicant-accused Gaurav Dhir.
10. The question that if there was any legal requirement to file said certificate or not, has become irrelevant especially when the forged document has been presented before the concerned authorities for the purpose of facilitation of refund. The entire argument that there was no legal requirement for the applicant-accused Gaurav Dhir to file such certificate as CA falls to the ground when the said certificate has been forged by the accused and used for the purpose of refund. It is not the matter of mere initiation of refund under the CGST Act only, rather now it appears to have become an offence punishable under Sections 420/467/468/471 of IPC wherein the maximum punishment prescribed is imprisonment for life. Surprisingly, the respondent has not added any of the aforesaid offfences against the accused persons for the reasons best known to the Investigating Officer but this court cannot overlook the fact that prima facie these offences have also been committed by the accused by forging the said certificate. As per the respondent, in the many other cases also such forged certificates have been used by the applicant-accused Gaurav Dhir. Meaning thereby, these acts were being committed by applicant-accused Gaurav Dhir in a routine fashion and applicant-accused Sunil was in hand in glove with co-accused Gaurav Dhir in doing so. Whether applicant-accused Sunil received any monetary consideration for usage of his UDIN, password and OTP on the refund portal or not is another aspect but the fact remains that he made mockery of the entire rules and procedure set up by the concerned authorities for the particular purpose and his acts went beyond the realms of professional misconduct. Again, it is very surprising that nothing has come on record from the side of the respondent that they have also reported the matter to the ICAI regarding the said grave professional misconduct of the applicants-accused Gaurav Dhir and Sunil. These are not offences committed by an illiterate or semi-literate or an unemployed youth. These offences are committed by the professionals, who are well qualified and very well employed. They very much knew consequences of their acts. The repercussions are grave leading to commiting criminal offences.
11. Learned counsel for the applicants-accused compared the profession of CA with the lawyers and doctors. Mere this analogy reflects how grave the offences committed by these two accused are. Can a lawyer give his professional license or his bar license number to be used by another person, who though has passed professional LLB course but has not obtained license from the concerned Bar Council, to appear in any court by impersonating him. If such lawyer does so, then he is doing so at his own peril and any document/affidavit so submitted by the latter using license number and name of the former with his explicit consent and understanding, will create grave consequences for both the persons. Here these professionals i.e. the accused persons had crossed the boundary of the professional ethics and stepped to commit criminal offences, making mockery of the entire system and set up of the government for facilitation of refund amount. It is not a case of solitary or occasional use of UDIN and in fact, it appears to be a routine practice followed by the applicant-accused Gaurav Dhir in mutual understanding with the co-accused Sunil. Such acts cannot be taken in a light manner. Very conveniently, both the applicants-accused have shrugged their shoulders by arguing that the alleged issuance of certificate and signing thereof is a matter between both the applicants-accused. If that is the case, there is no need for institutes offering courses either to CA or lawyer and a single person in the entire country or State is enough to lease his license in such a manner and what is the purpose for the concerned agencies to make rules when the professionals behave in such a manner taking the rules so framed for a toss.
12. So far as offences punishable under Section 132 of CGST Act, 2017 is concerned, as already discussed above, apart from these offences, the offence punishable under Sections 420/467/468/471, IPC are also prima facie made out against the applicants-accused Gaurav Dhir and Sunil. The authorities relied upon by learned counsel for the applicants-accused are not applicable to the facts of the present case especially when the applicants-accused have been involved in forging certificate and submitting the same to the concerned authorities for the purpose of taking refund claim and thus, creating a picture in the mind of the concerned agencies that the professional CA i.e. the person who has issued the certificate had gone through the entire record and had verified the same. The accused have also issued similar certificates in the other cases as well which is clearly reflected in the reply of the respondent. The investigation is not yet complete and the challan is yet to be filed in the present case. Bail to the accused at this stage may hamper the investigation of the case. Hence, the prosecution has reasonable apprehension that the applicants-accused may distort or destroy the evidence, if released on bail.
13. Even the Hon’ble Supreme Court of India in case cited as Nimmagadda Prasad Versus Central Bureau of Investigation, AIR 2013 SC 2821, has observed that :
“Economic offences constitute a class apart and need to be visited with different approach in the matter of bail. The economic offences having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economic of the country as a whole and thereby posing serious threat to the financial health of the country.”
Therefore, considering the gravity and the nature of the allegations levelled against the applicant-accused and the fact that the investigation of the case is at nascent stage and further considering the fact that now a days economic offences are rampant and should be dealt with the firmness, this court does not deem it proper to grant the concession of bail to both the applicants-accused at this stage.
14. Consequently, keeping in view the gravity and seriousness of the offences, both the present bail applications filed on behalf of the applicants-accused are hereby dismissed. It is clarified that none of the observations made herein above shall be construed to be a reflection on the merits of the case. The same are solely confined for the purpose of decision of the present applications. Both the files be consigned to the record room after due compliance.
