Case Law Details

Case Name : DGGI VS. Shyam Sunder Modi and Atul Modi (Patiala House Court)
Appeal Number :
Date of Judgement/Order : 17/12/2020
Related Assessment Year :
Courts : District Court

DGGI VS. Shyam Sunder Modi and Atul Modi (Patiala House Court)

As it is apparent that investigation is still underway as enquiries from various other stakeholders and recovery of documents is continuing and the fact that accused persons being father and son are main beneficiaries of the alleged fake ITCs and played a major role in the entire act, the release of accused persons at this stage would certainly undermine free and fair investigation. Accordingly, the application is dismissed.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

This is a joint bail application moved on behalf of both the applicants. It is submitted on behalf of applicant no. 1 Shyam Sunder Modi that he is aged about 64 years and is a known case of Diabetes Mellitus, Hypertension, low HDL. Cholesterol, Ulcertive Proctosigmoidisi and alarmingly High Level of HBA1C being 10.1 (Normal Range is under 5.7). It is submitted that applicant no. 2 Atul Modi is aged about 40 years and is a known case of Diabetes Mellitus, low HDL Cholesterol (at high risk of heart diseases) and has alarmingly High Level of HBA1C which has come as 9.2 (normal range is under 5.7) and was also diagnosed with severe obstructive Lung Disease, which puts the applicant in the High Risk Category of developing symptoms of Covid-19. It is submitted that the company of the applicants is giving employment to 80 plus employees and if they are not released on bail same will result in loss of economy and reputation. It is submitted that applicants have no prior history of involvement in any offence and they have joined the investigation on the first summon itself and they have deep roots in the society. It is submitted that the supplier Murli Bharathwaj of M/s Smartgen Infra Pvt. Ltd. of applicant’s company had already been granted bail by Hon’ble Telangana High Court. It is submitted that applicants have not tampered with any evidence before their arrest and after their joining of investigation. It is submitted that applicants have not been interrogated once in custody and their entire evidence is based on documents and applicants have already retracted their statements made to the department. It is thus prayed that bail be granted to both the applicants.

Reply filed by the department.

It is submitted by Ld. SPP that accused persons have utilized and availed ineligible ITC to the tune of Rs. 7.72 crore and thus committed a serious economic offence. It is submitted that M/s Smartgen infra pvt. Ltd was found to be non existence on its registered premises and its promoter admitted in the statement that statement of all fictitious transaction without actual movement of goods and confirmed that ITC credit availed on invoices by M/s Modi Infosole Pvt. Ltd. amounting to Rs. 2,21,40,071/- were availed without actual receipt of goods. It is submitted that M/s Smartgen Infra Pvt. Ltd. had issued invoices without movement of goods to M/s Modi Infos°le Pvt. Ltd.. It is submitted that when raid was conducted on M/s MIPL and statement of Manager Mr. Tarun Modi was recorded, he stated that MIPL purchased only invoices from M/s Smartgen Infra Pvt. Ltd. without receipt of any goods/services as M/s MIPL was facing some financial constraints and to discharge their outward liability through ITC which was availed on account of these invoices. He stated that after admitting the GST liability arising on account of ITC availed on the invoices received from M/s Smartgen Infra Pvt. Ltd. without any actual supply of goods he voluntarily deposited amount of Rs. 7 lac through DRC-03 U/s 74(5) of CGST Act 2017. It is submitted that investigation oncovered that MIPL has received invoices without actual receipt of goods from M/s Smargen Infra Pvt. Ltd. during the period February 2019 to January 2020 to the tune of Rs. 42.94 crores Taxable supply and utilized ineligible ITC amounting thereon to the tune of Rs. 7.72 crores. It is submitted that investigation is still underway as enquiries from various other stakeholders and recovery of documents is still going on. It is submitted that both the applicants are main beneficiaries and have played a major role in the entire fraud in which they not only availed and utilized ineligible ITC fraudulently but also passed on the same to other firms causing huge revenue loss to the Government exchequer.

Heard. Perused.

So far as the medical condition as pointed out in the application is concerned, for the said diseases adequate medical infrastructure is available inside the prison as nothing suggest that these diseases pose immediate life threat to the applicants. As it is apparent that investigation is still underway as enquiries from various other stakeholders and recovery of documents is continuing and the fact that accused persons being father and son are main beneficiaries of the alleged fake ITCs and played a major role in the entire act, the release of accused persons at this stage would certainly undermine free and fair investigation. Accordingly, the application is dismissed.

Copy of the order be sent to Ld. Counsel for applicant through email/whatsapp.

Download Judgment/Order

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