Gauhati High Court rejects Bail of the person accused of GST Evasion worth Rs.22.77 Cr [Read Order]

Gauhati High Court - Bail - GST Evasion - Taxscan

The Gauhati High Court rejected the Bail Application of the person accused of GST Evasion worth Rs. 22.77 Crores.

The Petitioner, Subhash Kumar Singh is found to have deliberately supplied goods without issuing invoices in violation of the provisions of AGST Act with intention to evade Tax during the period of 2019 to 2021. Pursuant to issue of the said notice the Petitioner was arrested and was forwarded to the learned Chief Judicial Magistrateciting reasons therein, inter alia that, that the Respondent has ascertained that the Petitioner has deliberately supplied goods without issue of invoices in violation of the provisions of the AGST Act with the intention to evade Tax and Cess.

Dr. Saraf, the Senior Counsel appearing for the Petitioner submitted that the Petitioner is running his business from his permanent place of business. He also has submitted that the Petitioner is a registered dealer under VAT, CST and GST that the Petitioner appeared before the authorities whenever he was directed to appear, that the Petitioner is a reputed businessman and has not been convicted in any case.

Dr. Saraf urged that there is no chance of flight risk and that the petitioner did not manufacture any false invoices. The senior counsel has further submitted that the Petitioner participated and co-operated in the enquiry.

On the other hand, Mr. M Phukan, the Public Prosecutor, Assam submitted that on scrutiny and examination of all seized documents, in presence of the tax payer and proprietor and /or his authorized representative, huge amount of tax evasion by the firm could be detected. Besides, during the course of enquiry all the seizures have been signed by the accused i.e., the Petitioner and his representative(s) respectively. It is further stated that it could be ascertained that the tax payer deliberately supplied goods without issuance of invoices in violation of the provisions of Assam GST Act, 2017 with the intention to evade tax. From the verification and examination of the documents it transpires that the total evasion detected inclusive of applicable tax, cess, penalty and interest is Rs. 22,767,13,211/- and this includes the tax and cess evaded which comes to Rs. 10,22,31,518.18/-. The Public Prosecutor, Mr. Phukan has also submitted that the taxpayer/accused Subhash Kumar Singh is liable under Section 132(1) (i) of the Assam GST Act, 2017.

The single judge bench of Justice Hitesh Kumar Sarma while refusing to grant bail held that the evasion of tax was more than Rs. 5 crores which necessitated the arrest of the Petitioner in compliance of the provision of Section 132 (1) (i) of the Assam GST Act, 2017. Hence, the argument put forth by the counsel for the Petitioner that the arrest of the Petitioner is illegal and arbitrary is devoid of any merit.

The Court has also taken note of the fact, as appears from the materials in the case record, that the Petitioner evaded tax worth more than Rs. 5 crores and the investigating agency has collected materials to show that the Petitioner is the originator of the fake invoices, etc and direct documentary evidence is there in the record about the active involvement of the Petitioner in tax evasion.

“The investigation of the case is still continuing in order to ascertain the location of the godown and to examine other related witnesses and also for calculation of interest in view of the revised notification (the notification is specifically referred to in para 34) regarding rate of interest which keeps varying from time to time. Moreover, if the Petitioner is enlarged on bail at this stage, he is more than likely to hamper the investigation and/or tamper evidence which may likely to compromise with the entire investigation,” the court said.

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