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Case Law Details

Case Name : CGST Vs. Mohd. Sabahuddin (Patiala House Court)
Appeal Number :
Date of Judgement/Order : 13/09/2022
Related Assessment Year :
Courts : District Court

CGST Vs. Mohd. Sabahuddin (Patiala House Court)

Considering that accused has admittedly not joined investigation pursuant to summons dated 19.04.2022 and 29.04.2022 and admittedly did not drop the Google pin location, therefore, has violated condition No.1 and 2 of bail order dated 17.02.2022 of Ld. Predecessor of this Court. Furthermore, since proper reasoning has been given by the department as to why question pertaining to M/s Zam Zam Exim Pvt. Ltd. has been put to the accused and that accused cannot avoid investigation or ignore summons issued by the department for joining investigation by raising grounds now regarding jurisdiction etc. when present application for cancellation of bail has been filed and accused has a right to silence but cannot ignore the summons issued by the department to join investigation especially when accused did not move for quashing of notice/summons himself, therefore, present application is allowed and bail granted to accused vide order dated 17.02.2022 is cancelled.

FULL TEXT OF THE JUDGMENT/ORDER OF DISTRICT COURT

Reply, rejoinder, counter reply and counter rejoinder have already been filed and supplied to the parties.

Arguments on behalf of Department as well as accused already heard.

The contention of the department is that accused was granted regular bail vide order dated 17.02.2022 by Ld. Predecessor of this Court. It is stated that the goods declared as handicrafts leather wallets supplied to NADFA Trading FZE by 14 firms in Delhi were found to be belts and wallets of very poor quality and as per the Chartered Engineer report were of Rs.31.95 lakhs instead of Rs.23.21 crore, which were declared by 14 firms to claim excess duties of drawback and reward under RoDTEP Scheme/refund of accumulated input tax credit. Accused Mohd. Sabahuddin was found to be the point of contact for M/S NADFA Trading FZE and looks after all the activities right from handing over packing list, invoices to CHA, procuring and bringing goods into spice Jet FTWZ, subsequent export to US, UAE, etc. and assisting in operational activities relating to consignment of NADFA. It is stated that all the 14 firms were found non existent and details of transporters were gathered from Eway bill Ota and M/S Best Logistics India was identified as the transporter “crating from Faridabad. On further investigation, it was found that transportation vehicles were booked by Sh. Ravi Sharma and goods were to be loaded from premises in Tri Nagar, Delhi but were actually loaded near Inder Lok Metro Station. When the premises at Tri Nagar, Delhi were searched, it was found that the premises belong to one Mr. Sadre Alam, who in his statement stated that leather wallets and belts were sold by him to one Sabahuddin in cash without issuing any invoices and value of goods sold was Rs.14 lakhs and pursuant to the same, accused Sahabuddin was arrested on 14.01.2022. It is stated that on further investigation it was revealed that ZAM ZAM Exim Private Ltd. Muradabard SEZ, wherein accused Sabahuddin is a Director had daimed to receive supply of hand crafted artificial leather wallet, scarfs made of man made fiber and wooden handicrafts articles amounting o Rs.35,30,14,644/- from 06 firms during 2020­2021. Also, the said 06 firms had major supply from same firms which were part of supply of chain 20 fake/non existent firms which were created on paper for getting export related benefit, vide order dated 17.02.2022, CMM, PHC, NDD has granted bail to accused subject to certain conditions viz. (1) that accused shall always share his location with the I0 by dropping his google pin on the google map; (2) that accused shall join the investigation as and when directed by the Investigating Agency, etc. and further it was mentioned in the order that for breach of any condition, department may approach the court for cancellation of bail. It is stated that accused had violated the abovesaid two conditions out of 06 conditions imposed by the Court while granting bail. It is stated that accused was issued summons dated 04.03.2022 to appear before SIO on 11.03.2022. However, accused did not appear on 11.03.2022 and vide e-mail dated 13.03.2022 informed that 15.03.2022 was the last date of filing of ITR and his IT returns were pending and requested to grant date of 16.03.2022 to appear before SIO. Accordingly, another summon dated 14.03.2022 were issued for accused to appear on 17.03.2022. Accused appeared before SIO on 17.03.2022 when his statement was recoded but summons dated 19.04.2022 and 29.04.2022 issued to the accused to appear before SIO and to furnish requisite documents on 25.04.2022 and 05.05.2022 were not honoured by the accused . In reply to summons dated 19.042022, accused send an e-mail dated 25.04.2022 informing that due to the month of Ramadan and fasting he was unable to collect the desired documents and sought two weeks time and in reply to summons dated 29.04.2022, he sent an email dated 06.05.2022 seeking 3-4 weeks time for submissions of relevant documents. It is stated that he is not cooperating in the investigation and not honouring the summons issued seeking his appearance to join investigation and thus condition No.2 imposed vide bail order dated 17.02.2022 has not been complied with. Furthermore, despite telephonic request to share his location with the IO, accused has not shared his location. On 06.05.2022 on accused being telephonically contacted, join investigation, he stated that he was in Calcutta and would come to Delhi via Mumbai withi❑ 2-3 days. However, accused did not share his location on that day also. Thus accused has breached conditio❑ No.1 of bail order dated 17.02.2022. It is accordingly prayed that bail granted to the accused may be cancelled and order dated 17.02.2022 may be set aside.

On the other hand, in reply, counsel for the accused has Stated that present application for cancellation of bail is filed U/Sec.439(2) of Cr.P.C. and this Court has no jurisdiction to entertain this application. It is stated that accused is one of the Director of M/S Zam Zam Exim Pvt. Ltd. And SGST authorities of Uttar Pradesh have jurisdiction and CGST North Commensurate cannot question accused regarding his firm ZAM ZAM Exim Pvt. Ltd. It is stated that at the time of grant of bail department has filed reply stating that two firms registered in the name of accused are not involved in the present case, so now present application is not maintainable and accused cannot be questioned regarding his said two firms. It is stated that the documents sought from the accused already available online. It is stated that the huge amount of refund at department level is a lapse on the part of the department and accused is being made as a scapegoat. Averments made in the application are denied. It is stated that accused has not violated the conditions of grant of bail, although accused took time to procure new SIM and shared his location with the department but after few messages there was an omission to send the same on daily basis but after filing of this application, he has regularly sending his location to the department.

Vide order dated 21.07.2022, clarifications were sought from the department on the point of jurisdiction, connection between the present case and the M/s Zam Zam Exim Pvt. Ltd. Pursuant to it, department has filed rejoinder and accused has filed counter reply.

It was stated on behalf of the department that there is a typographical error in the application and application may be read U/Sec.437(2) Cr.P.C. instead of U/Sec.439(2) Cr.P.C. it is stated that the 06 firms as mentioned above falls under CGST, Delhi Zone and department has identified supply chain consisting of 103 entities, all 20 L-0 firms are non-existent. It is stated that CGST, Delhi North is investigating this case, originally referred from DRI, Hyderabad in respect of supplies made by entities situated under the jurisdiction of CGST, Delhi North. Accused has been summoned in respect of investigation of non-existent entities falls under CGST, North Delhi which figure in the supply chain of ZAM ZAM Exim Pvt. Ltd., and M/s NADFA Trading FZE, Hyderabad. That presence of accused is necessary in the ongoing investigation. That the Delhi based suppliers of M/s Zam Zam Exim Pvt. Ltd. had received supplies from the same firms appearing in the supply chain of 20 L-O firms and 8 of the said common supplier firms falling under the jurisdiction of CGST, Delhi Commissionerates have been found non-existent at their respective principal place of business. Being a common beneficiary of common supplier firms, accused, Director of M/S Zam Zam Exim Pvt. Ltd. is required to be examined in respect of supplies made by CGST, Delhi, North based entities to the 6 L-0 exporting firms which have supplied to M/s Zam Zam Exim Pvt. Ltd. and simultaneously he is also required to be examined. Regarding supplied made by CGST, Delhi, North based firms to M/s NADFA Trading FZE for taking investigation to logical conclusion.

All the averments of the departments have been denied by counsel for the accused and prayer is made for dismissing the present application.

An application seeking exemption from personal appearance on behalf of accused Mohd. Sabahuddin is filed.

Heard. Record perused.

Considering that there is a typographical error in the title of the application and it is well settled that the Court which grants the bail can cancel the bail, therefore, present application is treated as application U/Sec.437(2) Cr.P.C.

Considering that accused has admittedly not joined investigation pursuant to summons dated 19.04.2022 and 29.04.2022 and admittedly did not drop the Google pin location, therefore, has violated condition No.1 and 2 of bail order dated 17.02.2022 of Ld. Predecessor of this Court. Furthermore, since proper reasoning has been given by the department as to why question pertaining to M/s Zam Zam Exim Pvt. Ltd. has been put to the accused and that accused cannot avoid investigation or ignore summons issued by the department for joining investigation by raising grounds now regarding jurisdiction etc. when present application for cancellation of bail has been filed and accused has a right to silence but cannot ignore the summons issued by the department to join investigation especially when accused did not move for quashing of notice/summons himself, therefore, present application is allowed and bail granted to accused vide order dated 17.02.2022 is cancelled.

The judgments in Somaiya Organics Vs. State of Uttar Pradesh 2001 (130) E.L.T.3 (SC), Commissioner of Customs V. Sayed Ali, 2011 (265) ELT 17 (SC), Canon India Pvt. Ltd. Vs. Commissioner of Customs, 2021 (376) E.L.T. 3(SC), order dated 05.05.2022 passed by Hon’ble High Court of Andhra pradesh in Writ Petition No. 13794 of 2020 and order dated 08.07.2022 passed by the Hon’ble high Court of Kerala in CH. M.G. No.2807 of 2022, relied on by counsel for the accused are of no assistance to the accused as iire decided on different fact situation and cannot be applied like a Euclid Theorem.

Therefore, bail bonds of accused is forfeited. Let NBWs shall be issued against the accused and notice U/Sec.446 Cr.P.C. to his surety, returnable on 19.09.2022.

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