Thiru. Yasar Arabath, Vs Deputy Commissioner (State Taxes) (Madras High Court)
In this case there is Sufficient materials available to show the petitioner without having inward supply of goods, have issued fake invoices without actual movement and supply of. He made total cash payment of Rs.7,30,324/- only as against the Rs.5,23,66,944/-. Hence, the offence committed exceeds Rs.5 crores. The offence committed falls under Section 132(1) of TNGST Act 2017. Hence, it is a non-bailable offence. The evidence gathered against the petitioner and the total loss of the State due to the tax credit evasion being detailed out in the counter elaborately. It is further stated that the investigation not yet completed to identify the other fake floated by the petitioner. Therefore, the investigation has entered very crucial stage, if the petitioner is granted bail, it will cause hindrance to the investigation and he may even tamper the evidence.
The reading of Sections 132 (1) (a), (b) and (c), 132(5) of Tamil goods and Services Tax Act and the explanation thereof made amply clear that in the instant case the tax evasion exceeds Rs.500 Lakhs i.e., Rs.5 Crores.
It is correct to say the arrest memo and remand report does not reflect the same figure. However, the material placed along with the remand report would show that the tax evasion on different heads had exceeding more than Rs.500 Lakhs. From the material placed by the prosecution show a continuous offence committed by the petitioner herein since 2018-2019 and the figure of Rs.4,78,47,505/- was only till July 2021. Whereas, the remand application is on 10.01.2022 which reflects the loss of revenue under three different heads with exceeds more than Rs.5 crores. Therefore, the plea of the petitioner that offence committed by him is only a bailable offence and the tax evasion is less than Rs.5 crores is contrary to the records placed by the prosecution.
As far as, the custodial interrogation viz., grant of bail it is necessary to take into account the apprehension of the respondent that the petitioner who has floated fictitious companies and create records, if let out on bail per the evidence. Since the investigation has entered the crucial stage, the the petitioner at this stage will lead to tampering of evidence. The objections of the respondent is well found and therefore, this Criminal Original Petition is dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Criminal Original Petition is filed by the petitioner who was arrested on 10.01.2022 and remanded to judicial custody for the offences under Section 132(1)(b) & (c) of z, in R.R.No.01 of 2022, on the file of the respondent police, seeks bail.
2. The magnitude of the loss to Government revenue as alleged to Rs.5,16,66,620/-. The remand application of the Deputy Commissioner (State Taxes), Inspection – II, Intelligence Wing Chennai/complainant indicates that the petitioner herein is the Proprietor of Tvl.Golden Traders engaged in bill trading activities and passing on Input Tax credit to various companies fraudulently and on the date of filing the complaint, the loss of revenue to the Government is assessed as Rs.4,78,47,505/-. In the complaint, it is stated that without any stocks worth mentioning in a place business premises having 10*10 (100sq.ft), the petitioner created document as if he is transacting several crores of rupees and created bills for the purpose of availing input tax credit. After giving opportunity to the accused/petitioner herein, on verification of ledgers for the year from 20 18- 2019 to 2021-2022 (upto November 2021) Input tax credit has been adjusteds liabilities and has paid a meager amount as cash. Also on verification one, it has come to the notice of the authorities, the accused has raised invoices without making actual movement of goods and passed over input tax credit also the accused in the name of Tvl.Golden Traders for the year 20 18-2019 (February 2019) to 2021-2022 upto (July 2021) have effected inward supply from the tax payers who are declared as “Non-existence”. The availed input tax credit for a value of Rs .3,39,18,138/- stating that having committed an offence of enriching himself by issuing invoice without supply of goods and availed input tax credit fraudulently without genuine invoice and wrongful utilization of the amount, all put together over and above Rs.5 crores liable to be prosecuted for non-cognizable offence.
3. The petitioner herein seek bail on the ground that the allegation against him is evasion of input tax credit to a tune of Rs.3.39 crores which is bailable offence as per Section 132 of the TNGST Act 2017. Further, no adequate opportunity was given to him before remand which is mandatory requirement under Section 132 (1)(ii) of the TNGST Act. The grounds of arrest ought to have been provided to the accused persons as per Section 69(2) of the TNGST Act which was not communicated to the accused. In any event, the petitioner bail for about 60 days is entitled for bail since custodial interrogation already over and his deterioration in prison not more required.
4. In the counter filed by the respondent would submit that the complaint was raised after proper inspection of the petitioner’s premises and collection of records. The petitioner was given adequate opportunity and he appeared before the authority on 24.08.2021 and produced certain document which lacks authenticity and thereafter, when he again summoned for production of document, he failed to produce the document though he appeared on 08.12.2021. His sworn statement was recorded on that day and the petitioner accepted that he has produced the fake invoices to Tvl.Selva Vinayagar Steet and others without supply of goods and also accepted to pay the liability which has wrongly passed to be beneficiaries. When he was again summoned to appear on 11.12.2021 on behalf of the petitioner, his legal representative turned up and sought time till 07.01.2022. In spite of seeking extension of time, no record was produced and therefore, with the available record the tax evasion and fraud has been arrived as below:-
