Case Law Details
Yogesh Jagdish Kanodia Vs State of Maharashtra (Bombay High Court)
Conclusion: Where Input Tax Credit (ITC) had been wrongly availed exceeds Rs.5 crores it would amount to a cognizable and non-bailable offense and the offence was punishable with imprisonment for a term, which could extend to five years and with fine under section 132 (1) (i) of the CGST Act.
Held: The respective authority proceeded against assessee on the basis that he had committed offence under section 132 (1) (b) (c) of the CGST Act and that since the input tax credit wrongly availed by assessee exceeded Rs.500 lakh (Rs.5 crores) and the offence was punishable with imprisonment for a term, which could extend to five years and with fine under section 132 (1) (i) of the CGST Act, it was a cognizable and non-bailable offence under sub-section (5) thereof. The power to arrest assessee was exercised by respondent No.2 under Section 69 of the CGST Act. It was held that the material presently available on record prima facie indicated that not only was assessee alone responsible for the activities of the aforesaid four firms and that the entire KYC details and other information for registration of the said four firms pertained only to assessee, but assessee had indulged in prima facie fake claims regarding addresses of the said four firms. This is evident from the fact that affidavits in possession during the course of investigation from landlords and owners of premises from where the said four firms were purportedly conducting business, stating that no lease deeds were ever signed by such landlords and owners, thereby indicating that such wrongful and illegal activities of claiming input tax credit were undertaken by creating fake entities stated to be carrying out business activities from fake addresses. In tax frauds the modus operandi of creating fictitious entities to get around the rigours of law was not unknown. It could not be said that assessee had been able to make out such a strong prima facie case that his arrest under the provisions of the CGST Act could be said to be in violation of procedure established by law, thereby violating his right under Article 21 of the Constitution of India. Therefore, assessee had not been able to make out a case for exercising jurisdiction of this court under Article 226 of the Constitution of India.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. Rule. Rule made returnable forthwith. With the consent of learned counsel appearing for the parties, heard finally.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
