Fraudulent Postings and VAT Assessments using VAT is System: Gujarat HC grants Bail to Retired Tax Superintendent [Read Order]

The Gujarat High Court has recently allowed a retired Sales Tax Officer allegedly involved in fraudulent postings and VAT assessments using the VATis system.

Allegedly, the applicant, a Sales Tax Officer, who retired as Tax Superintendent, conducted false postings in the VATis system and acknowledgment receipts have been generated and by committing offences of misappropriation, causing a loss to government treasury of Rs.5,98,29,882/-, out of which an amount of Rs.1,98,75,998/- had been recovered and at present, an amount of Rs.3,99,53,884/- is yet to be recovered from the petrol pump traders. It was alleged that Advocate Kamlesh Heruwala, Accountant Sagar Banawala, Senior Clerk Nareshbhai Savabhai Chowdhury, Senior Clerk Prakashbhai Jagdishbhai Chudi had made the postings from the login ID of other employees. Thus it is alleged against the present applicant that in connivance with Advocate Kamlesh Heruwala and others, under the VAT Act, fraudulent postings and assessment had been done in relation to the registered traders.

The main allegations against the present applicant were that the Login I.D. of the applicant was used to cause 207 entries in VATis system, out of which 29 dealers generated acknowledgment receipt to the tune of Rs.86,22,879/-. Further, it is alleged that with regard to the assessment of 4 dealers for the financial year 2015 – 2016, manual challans were approved without due verification.

Learned Advocate for the applicant submitted that it is a case of misuse of Login I.D. and Password of the applicant.

Referring to section 34 of the Gujarat VAT Act, Justice Gita Gopi observed that the question of whether there has been a criminal conspiracy or any negligence of the applicant would be a question that is to be examined during the course of trial by adducing evidence. “How the challans were manipulated and false postings were made in the VATis the system with an intention to defraud by causing losses to the Government exchequer would be a question of fact.”

Granting regular bail to the applicant, the High Court concluded that “However, for the amount to the extent of Rs.5,98,29,882/- which is noted to be in relation to the 29 defaulters, the data could not tally with the VATis system from the year 2013. Recovery to the extent of Rs.1,98,75,998/- has been made and the Department would be in the process of recovering the rest of the money from the registered traders. Whether any illegal gratification has been received by the present applicant for any manipulated, fraudulent entries with an intention to cause loss to the Government treasury would be a question of evidence that would be required to be examined during the course of the trial. Further, since the charge-sheet is filed and considering the facts and circumstances of the case, this Court finds this to be a fit case where discretion could be exercised in favor of the applicant.”

ASHWINBHAI KANTILAL JOSHI vs STATE OF GUJARAT

CITATION: 2022 TAXSCAN (HC) 109

To Read the full text of the Order CLICK HERE

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