Fake GST bill upload on Portal and Wrongful ITC Claim: Punjab & Haryana HC grants Anticipatory Bail [Read Order]

The Punjab and Haryana High Court granted anticipatory bail to accused uploading fake bills on GST Portal and wrongfully claiming Input Tax Credit ( ITC ) worth Rs. 25 Crores.

The FIR came to be lodged pursuant to a complaint made by Assistant Commissioner of Excise, against Sumit Kumar, Sammy Dhiman, Mandeep Dhiman, Sudhir Kumar Verma, Mukesh Gautam, Karan Kumar, Ravi Kaushal and Kushal Kumar alleging therein that the accused, in connivance with each other, had created fake forms and had forged and fabricated fake bills showing inter se transactions of sales and purchases and had uploaded the same on the portal of GST and had further sold the bills to the manufacturing firms at Mandi Gobindgarh and Ludhiana and had earned commission from the said firms and had thus caused loss to the Government to the tune of about Rs.25 crores by way of getting ‘Input Tax Credit.

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Accused Sammy Dhiman was arrested on 31.10.2023 and upon being interrogated, he disclosed that Avtarjit Singh, Komal Sharma had masterminded the fraud. He further disclosed that Mandeep Singh (petitioner) had created a false firm at Faridabad under the name and style of Shree Radha Krishan Steels, Faridabad and after obtaining Excise and VAT number had converted the same into GST.

It is further alleged that in the same manner Mandeep Singh along with Avtarjit Singh, Komal Sharma, Jatinder Menro had created 4 different firms at Delhi and Faridabad and after obtaining Excise and VAT numbers had shown fake stock of 15000 tonnes of iron/scrap with his bogus firm Shree Radha Krishan Steel, Faridabad. Pursuant to aforesaid disclosure statement, Avtarjit Singh, Komal Sharma, Jatinder Menro and Mandeep Singh came to be nominated as accused on 2.11.2024.

It was alleged that fraudulent claims of ‘Input Tax Credit’ (ITC) had been made on the basis of false documents and fictitious transactions by creating dummy firms which were actually not doing any business.

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Counsel representing the petitioners submitted that proceedings pursuant to the FIR are infact an abuse of process of law inasmuch as the petitioners are also being proceeded against in a complaint under Section 132 of Central GST Act 2017, instituted on 30.8.2018, pending before the Court of Chief Judicial Magistrate, Ludhiana, and wherein the petitioners had remained behind bars for more than one year and since the police never took any step to arrest the petitioners during the last 5 years in the instant FIR, necessarily indicating that custodial interrogation was not really required, the alleged recording of disclosure statement of co-accused Sammy Dhiman on 31.10.2023 or addition of offences under Sections 465, 467, 468, 471 IPC at this belated stage vide DDR No.9 dated 26.12.2023 is nothing, but a ploy to falsely involve the petitioners in the case at this belated stage so as to throw them behind bars.

In State of Maharashtra vs. Sayyed Hassan (2019) the Apex Court held that Section 55 of Food and Safety Standards Act, 2006 being a specific provision made in the special enactment but still an offence under Section 188 of IPC is made out.

The petitioners have also been proceed in a complaint filed against them under under Section 132 of CGST Act, which is pending at Ludhiana wherein petitioner-Jatinder Menro remained in custody for 1 year and 8 months and petitioner-Mandeep Singh remained behind bars for about 1 year. It is also not in dispute that the petitioners were not on the run and had associated themselves with the authorities concerned. However, the petitioners now apprehend their arrest on account alleged disclosure statement dated 2.11.2013 by Sammy Dhiman and addition of offences punishable under Sections 465, 467, 468, 471 IPC. It is now pursuant to recording of said disclosure statement that the petitioners came to be nominated as accused in the present FIR on 02.11.2023.

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“It was found that the allegations as in the complaint under Section 132 of CGST Act and in the FIR are more or less overlapping and also that the allegations pertaining to raising of false bills for showing false transactions would specifically be covered under offences under CGST and also that the petitioners have remained behind bars for a substantial period in respect of a complaint under Section 132 of CGST Act and neither the petitioners are alleged to been on the run during these five years nor the police had chosen to arrest them ever since lodging of the FIR, this Court is of the opinion that it is a fit case for grant of anticipatory bail to the petitioners.”, the bench held.

The bench of Justice Gurvinder Singh Gill has directed that “the petitioners be released on interim bail subject to their furnishing personal bonds and surety bonds to the satisfaction of Arresting/Investigating Officer.”

To Read the full text of the Order CLICK HERE

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