Case Law Details
Neeraj Karande Vs Directorate General of GST Intelligence (Telangana High Court)
In view of the above rival submissions, the allegations against the petitioner are that he has collected and issued invoices or bills without actual supply of goods in violation of the provisions of the CGST Act and the rules made thereunder leading to wrongful availment or utilization of input tax credit rendered by him and his Company. The modus operandi adopted by the petitioner is that he indulged in issuing GST invoices and e-way bills and passing on input tax credit to various customers without actual supply of goods. It is also specifically mentioned in the remand application that the registered office and also the factory of the petitioner are non-existent one. According to the respondent authorities, the bank has sold the unit of the Company by invoking the procedure laid down under SARFAESI Act. Both the registered office and the factory are found to be not in possession of the Company since 2016. The petitioner has filed irregular inward ITC credit of Rs.5.46 crores and outward irregular ITC credit of Rs. 5.43 crores from 01.07.2017 to 31.08.2020. In the statement recorded under Section 70 of the CGST Act, the petitioner has admitted that presently there is no registered premises of the factory. The business is being run by him from the vehicle viz., Grey Colour Swift Dezire TS07 1667. He is also conducting business by using his laptop and mobile No. 9493895762. He has answered that based on the invoices created in the laptop, he has raised documents like e-way bills using hotspot and transfer documents created through e-mail [email protected]. He also answered that he will submit all the related documents like invoices, e-way bill after retrieval from his mail, as far as possible.
In the counter affidavit, the respondent authorities specifically contended that the investigation is not yet completed. The forward chain recipient of the tax credit is to be investigated. Due to ongoing investigation, the department could lay its hand on an amount of Rs.42,90,133/- in the electronic credit ledger of the Company of the petitioner. Further, a provisional attachment order under Section 83 of CGST Act was issued to the banker of the Company. Steps have been undertaken to get the laptop recovered under panchanama dated 02.11.2020 to be forensically examined by CFSL, Hyderabad. Such forensic science laboratory report is awaited. Steps have been taken to prevent further loss to the Government exchequer by blocking the ITC credit under Rule 86A(1)(a) of the CGST Act as the competent authority i.e., the Additional Director General has accorded approval along with reasons to believe that the ITC has been fraudulently availed and is ineligible due to two counts i.e. the petitioner has availed credit on fake invoices obtained without supply of goods and Company of the petitioner not conducting business from its registered place.
Thus, there are serious allegations against the petitioner. There are several aspects to be investigated into by the investigating officer during the course of investigation. The modus operandi said to have been adopted by the petitioner in commission of offence is to be investigated into by the investigating officer. The GST amount involved for the operations carried out by him for the period from 01.7.2017 to 31.08.2020 is Rs.10.89 crores. Admittedly, the investigation is pending.
Considering the above and also the offences alleged to have been committed by the petitioner and also the aspect that the petitioner was arrested only on 02.11.2020, this Court is not inclined to grant regular bail to the petitioner.
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