The Gujarat High Court last week upheld the validity of the provisional attachment proceedings initiated by the GST department and granted bail to the accused person who was allegedly involved in fraudulently availing the input tax credit (ITC).
The applicant is a designated partner and managing director of “Utkarsh Ispat LLP,” which is in the business of purchasing mild steel scrap and, thereafter, converting it into mild steel billet. The department conducted a search and seizure operation at the factory and office premises of the LLP and at the residence of the applicant on the ground that several purchase transactions had been made from fictitious entities.
The department contended that the property of the applicant is already attached immovable property in excess of the amount of alleged evasion or fraudulent claim of input tax credit made by him.
Allowing the above plea of the department, Justice Gita Gopi held that “If that be so, then the interest of the respondent-Department is already protected. The provisions of Section 138 of the GGST Act & CGST Act provide for “compounding ofoffences”. Under sub-section (1) of section 138, any offence under the Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment by the person accused of the offence to the Central Government or the State Government, as the case may be, of such compounding amount in such manner as may be prescribed provided that such power of compounding shall be available once in respect of any of the offences specified in clauses (a) to (f) of sub-section (1) of section 132 as also the offences specified in clause (l), which are relatable to offences specified in clauses (a) to (f) of the said sub-section.”
Considering the argument that no other complaint under the GGST Act or CGST Act has been registered against the applicant and he is suffering from Prostrate Cancer and is presently, undergoing treatment at Nadiad in pursuance of the order dated 05.01.2022 passed by this Court, the Court granted bail to him subject to conditions.
“The authorities shall release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, the trial Court concerned will be free to issue warrant or take appropriate action in the matter. Bail bond to be executed before the lower Court having jurisdiction to try the case,” the Court said.
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