GST: HC granted bail to assessee since all material evidences been gathered during investigation

Rohit Berlia Vs Intelligence Officer, Director General of Goods & Service Tax Intelligence (Orissa High Court)

In the instant case, the petitioner was arrested on 05.08.2021 for an offence punishable under Section 132(1)(c) CGST Act, 2017 having availed fake ITC by the firm M/s. Arshee Ventures during the period from July, 2017 to March, 2019. As is made to understand, the business premises of the firm was searched and inspected in the year 2018 by CGST Intelligence Wing and the petitioner’s statement was recorded and was further examined on couple of times once in the year 2019 and soon before his arrest in the month of August, 2021 and in the meantime, final PR was submitted on 5^th October, 2021. The petitioner is claimed to be the authorized agent of M/s. Arshee Ventures with his wife as its proprietor. The allegation is to the effect that the firm in question availed ineligible ITC and also made it available for other business entities by providing fake invoices and thus, passed on within and outside the State. The details of the documentation regarding the illicit transactions have been revealed during investigation. The conclusion which has been drawn by the investigating agency is entirely based on documents which are shown to have been seized during and in course of investigation. No doubt, the materials on record prima facie suggest the involvement of the alleged firm in engaging itself in activities whereby bogus ITC was claimed on the strength of fake invoices without physical receipt and supply of goods. That apart, the investigation revealed availment of ineligible ITC of huge amount without receipt of any goods/ services. The fake business entities appear to have been identified. In other words, all the relevant materials which are required to subject the petitioner to prosecution can be said to have been collected during investigation. The petitioner happens to be a local inhabitant of Sambalpur. The firm is being run in the name of wife of the petitioner. Being a permanent resident of Sambalpur, the Court is of the view that there is a remote possibility of petitioner absconding or fleeing from justice. The extent of illegality in availing ITC in juxtaposition to the plea of the petitioner is in any case to be examined during and at the end of trial. The enquiry lasted for nearly two years ever since the business premises of the firm was searched and inspected by the Intelligence Wing of CGST. Since all the material evidence appears to have been gathered during investigation and considering the fact that final PR has, in the meantime, been submitted in the month of October, 2021 and taking into account the fact that the trial is unlikely to be accomplished in the near future and as the accused not being an outsider but a local of Sambalpur town, the Court is of the considered view that the petitioner, who has remained in judicial custody for nearly five months, should be enlarged on bail with stringent conditions which are as follows.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. This is an application under Section 439 Cr.P.C. filed by the petitioner for bail in connection with 2 (C) CC No.328 of 2021 arising out of DGGI/BbZU/INV/110/GST/2018 registered under Section 132(1)(c) of CGST Act, 2017 punishable under Section 132 (1)(i) thereof pending in the court of learned S.D.J.M.(Special), Bhubaneswar on the stated grounds.

2. The business firm in the name and style of M/s. Arshee Venture being engaged in trading of sponge iron, iron scrap and billets since 2016 is registered under the GST law. It is alleged that the place of business of the said firm was searched and inspected by the officers of the CGST Intelligence Wing on 30.10.2018 and seized certain documents. As per the allegation of the CGST authorities, the petitioner and his wife admitted irregular transactions having taken place by issuing sale bills without actual supply of the goods and in the process, tax credit was claimed without actual receipt of goods and tax liability was admitted and paid without physically supplying any goods and claimed tax credit and admitted tax liability on fictitious purchases and sale transactions.

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