Case Law Details

Case Name : Vinod Kumar Vs State of U.P. ( Meerut District Court)
Appeal Number : Bail application No. 708 & Computer Registration No. 826 of 2021
Date of Judgement/Order : 05/02/2021
Related Assessment Year :
Courts : District Court (24)

Vinod Kumar Vs State of U.P. ( Meerut District Court)

The present bail application has been moved by accused Vinoad Kumar son of late Shri Ram Karan Garg resident of 49, Banarsi Dass Estate Timarpur, Delhi in case no. 73 of 2020 DGGI, Ghaziabad under Section 132(1)(b) 132 (1) (c) read with Section 132 (1) (i) of the Central Goods and Services Tax Act, at Police Station of Directorate General of Goods and Service Tax Intelligence (DGGI), Ghaziabad, District Ghaziabad.

The facts giving rise to the case are that an arrest memo under Section 69 of the Central Goods and Services Tax Act, 2017 was served upon the accused Vinod Kumar in case no. 73 of 2020 under sections 132(1)(b) 132 (1) (c) read with Section 132 (1) (i) of the Act by DGGI, Ghaziabad referring therein that the accused has committed an offense specified in clause (a) or clause (b) or clause (c) or clause (d) of sub section (1) of Section 132 of the Central Goods and Service Tax Act, 2017 which is punishable under clause (i) or (ii) of sub­section (1) or sub­section (2) of the said Section.

One Panchnama was executed on14-­06-­2019 Eight Panchnama were executed on 24.11.2020, one Panchnama was executed on 25-­11-­2020, and one Panchnama was executed on 26-­11-­2020. Shri Vinod Kumar, in his statement recorded on the spot under Section 70 of the Central Goods and Service Tax Act 2017 on being asked about the goods purchased from the four entities M/S Jain Trading Company (GSTIN: 07AJPPJ2500GIGH), M/S Bankey Bihari (GSTIN: 07BMLPK6659KIZC), M/S Paras Trading Company (GSTIN: 07 DDMPK0972FIZF), and M/S Mahi Enterprises (GSTIN: 07GXPRS1525NIZM), which have been proved to be non existent and Vinod Kumar could not furnish any of the documents pertaining to transportation or payment. Above mentioned four entities have been proven to no existent and having passed on the fake ITC of Rs. 1.30 Crore put up before Vinod Kumar. Subsequently, more such fake firms surfaced during the investigation in as much as they were non existing at their place of business and having no business dealing with M/S Shre Ram Sales Corporation. Shri Vinod Kumar never appeared in person before investigating officer on 24­-06-­2020, 01-­07-­2020, and 22­07­-2020. Rather, some of the documents were submitted by the representative of /Shri Vinod Kumar. He did not appear on 18­-09-­2020 before investigating officer. Shri Vinod Kumar was given ample opportunity to produce the vital documents as such transport documents and payment particularly during the recording of his statement on 28­-02-­2020. In this regard several summons were issued to him on 18­03-­2020, 28-­05-­2020, 13-­08-­2020, 22-­10-­2020, & 23-­12-­2020 to produce such documents in support of his claim but Shri Vinod Kumar did not submit requisite documents and every time furnished evasive replies either citing his illness or some other reason. Statement of Vinod Kumar was recored the very day under Section 70 of the CGST Act 2017 in the office of DGGI Ghaziabad and the investigation report was put up before the competent authority i.e. Additional Director General, Directorate General Goods and Service Tax Intelligence Meerut Zone Unit on the very day who in his noting dated 30­-12-­2020 has conclusively mentioned that he he has reasons to believe that Shri Vinod Kumar may be put under arrest for free and fair investigation of the case. Accordingly, he was place under arrest by the authorised officer on 30-­12­-2020 at 6:15 P.M. in the office of DGGI at Ghaziabad and he has been explain the grounds of his arrest. He was also informed his right to have someone informed about his arrest and Ms. Shashi Garg has been informed about his arrest by Rajiv Nagar, Itelligence officer.

The learned counsel Shri D.V.Saini for the accused has submitted that the applicant was arrested on 30.12.2020 by the prosecuting agency and has been in custody since then. The applicant is ‘Karta’ of M/S Shri Ram Corporation and is engaged in the business of paper and board. A search was conducted at the premises of the applicant on 28­02­2020 but no incriminating document or unaccounted cash, any loose papers/slips or any other kind of incriminating material was found during search. The applicant was confronted with the fact that he had purchased goods from four entities M/S Jain Trading Company (GSTIN: 07AJPPJ2500GIGH), M/S Bankey Bihari (GSTIN:07BMLPK6659KIZC), M/S Paras Trading Company (GSTIN: 07DDMPK0972FIZF), and M/S Mahi Enterprises (GSTIN: 07GXPRS1525NIZM), and had availed a ITC of Rs.1.30 Crore. The applicant appeared before the authorities on 04­-06­-2020, 01-­07-­2020 and 22­-07-­2020 even during the lock down. He also appeared before the authorities on 18­-09-­2020. On 30-­12­-2020 another search was conducted at residence of the applicant but no incriminating document was found at his address. The instead of making inquiry at the time of search itself merely to harass the applicant, he was taken by the DGGI officials to Kaushambi. Actually, the applicant was place under arrest in the morning at Delhi itself. Thereafter the entire story of issuing summons was concocted by the respondents.

It has also been further submitted by the learned counsel for the applicant that applicant was arrested only because declined to pay any amount towards GST without adjudication of any demand against him. In the present matter there is no first information report or complaint, hence the custody of the applicant is illegal.

The learned counsel for the applicant also submitted that the prosecution of any person is directly linked with determination of evasion of tax if there is no evasion of tax, then there cannot be criminal liability. The applicant is only on earner of his family.

The learned counsel for the applicant also submitted that the entire case of respondent and investigating agency are based on the documents i.e GST/returns and no purpose would be served by keeping the applicant in jail. The basic rule of the criminal justice system is “bail, no Jail”. The arresting of the applicant is clear violation of Section 69(2) of the CGST Act thus the custody of the applicant without jurisdiction. In the present matter the department has contravened the provisions of Section 69(2) of the CGST Act. The applicant is a bonafide businessman and followed a routine business practice. All the allegations are false and concocted.

The learned counsel for the applicant also submitted that the offence of availing credit I cognizable and non bailable under Section 132 (1)(i) of the CGST Act i.e. only if the amount of such availment exceed Rs. 5 crores.

The learned counsel for the applicant also submitted that the applicant suffers from acute diseases and is on special diet and the applicant always requires an attendant to help him with the daily routine jobs and is 50 years old and needs continuous medical supervision.

Except all the arguments and facts, the learned counsel for the applicant has also cited so many case law in bail application. Hence prayed for bail.

Per contra the special prosecutor Shri Lakshay Kumar for the department has opposed the bail application and has argued that the applicant/accused has committed an offence which is cognizable and non­bailable. There is no provision in the Act according to which the accused can be arrested only after conclusion of the adjudication proceedings. An arrest memo under Section 69 of the Central Goods and Services Tax Act, 2017 was served upon the accused Vinod Kumar in case no. 73 of 2020 under sections 132(1)(b) 132 (1) (c) read with Section 132 (1) (i) of the Act by DGGI, Ghaziabad referring therein that the accused has committed an offense specified in clause (a) or clause (b) or clause (c) or clause (d) of sub section (1) of Section 132 of the Central Goods and Service Tax Act, 2017 which is punishable under clause (i) or (ii) of sub­section (1) or sub­section (2) of the said Section.

Further it has also been contended that many Panchanama have been executed and the applicant in his statement recorded on the spot under Section 70 of the Central Goods and Service Tax Act 2017 on being asked about the goods purchased from the four entities M/S Jatin Trading Company (GSTIN: 07AJPPJ2500GIGH), M/S Bankey Bihari (GSTIN: 07BMLPK6659KIZC), M/S Paras Trading Company (GSTIN: 07 DDMPK0972FIZF), and M/S Mahi Enterprises (GSTIN: 07GXPRS1525NIZM), which have been proved to be non existent and Vinod Kumar could not furnish any of the documents pertaining to transportation or payment. Above mentioned four entities have been proven to no existent and having passed on the fake ITC of Rs. 1.30 Crore put up before Vinod Kumar. Subsequently, more such fake firms surfaced during the investigation in as much as they were non existing at their place of business and having no business dealing with M/S Shree Ram Sales Corporation. The applicant never appeared in person before investigating officer. Rather, some of the documents were submitted by the representative of /Shri Vinod Kumar. Shri Vinod Kumar was given ample opportunity to produce the vital documents as such transport documents and payment particularly during the recording of his statement on 28­02­2020. In this regard several summons were issued to him on to produce such documents in support of his claim but Shri Vinod Kumar did not submit requisite documents and every time furnished evasive replies either citing his illness or some other reason. Statement of Vinod Kumar was recored the very day under Section 70 of the CGST Act 2017 in the office of DGGI Ghaziabad and the investigation report was put up before the competent authority on the very day who in his noting dated 30­12­2020 has conclusively mentioned that he has reasons to believe that Shri Vinod Kumar may be put under arrest for free and fair investigation of the case He was also informed his right to have someone informed about his arrest and Ms. Shashi Garg has been informed about his arrest by Rajiv Nagar, Intelligence officer.

I have heard the Special prosecutor for the department and the learned counsel for the accused at length and perused the record.

During his statement recorded by the DGGI, GRU, Ghaziabad the applicant admitted he has irregularly availed the input tax of Rs. 1.30 Crore and assured the officers he will deposit the entire dues of G.S.T. but due to financial conditions he is unable to pay the same. The applicant also stated in his statement that for the purpose of purchase he is not in direct touch with the suppliers and even not know the proprietors of the firms. The applicant about total ITC of Rs. 8,52,43,881/­ availed by him, did not explain properly and reply satisfactorily. The applicant is sole proprietor of his firm and responsible for every act of his firm. Suffice to say prima­facie, the accused has committed an economic offence and caused monetary loss to the State which is most harmful. Investigation is still underway.

Keeping in view the facts and circumstance of the case and the gravity and seriousness of the offence, without making any comment upon the merits of the case, I do not find it a fit case for bail. Hence, the bail application is liable to be rejected.

ORDER

The bail application of the accused Vinod Kumar is rejected.

Date­ 05.02.2021

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