The Chhattisgarh High Court refused to grant the bail to persons alleged of wrongful availment of Input Tax Credit (ITC) on the basis of fictitious transactions worth Rs. 258 Crores.
The issue required to be inquired is availment and transmission of Input Tax Credit (ITC) on the basis of mere paper transactions / fictitious supply transactions involving GST to the tune of Rs. 258 Crores indicating total fictitious business in terms of taxable value to the tune of Rs. 1400 Crores.
The petitioners, Paritosh Kumar Singh, Ravi Kumar Tiwari, Munna Tiwari, Kaushal Tiwari are accused of creating several fictitious and physically nonexistent trading company firms in Chhattisgarh, Jharkhand, Madhya Pradesh, West Bengal, Maharashtra and registered them in GSTN portal online, using identity credential of several persons using forged PAN and had issued fake bills to transmit fake ITC to several other traders. The petitioners, for the purpose of such fictitious trading had fraudulently shown in their GST returns to have procured several kinds of goods from within and across the State.
The Directorate General of Goods and Service Tax Intelligence, Raipur Zonal Unit, Raipur had cracked this racket on the basis of intelligence against a taxpayer named M/s Manoj Enterprises who during the month of July-2020 and August-2020 claimed Rs. 44.72 crores from ITC by way of trading activities even when their statutory returns did not indicate the purchase of any such goods for trade. On the basis of the information gathered, petitioners were arrested.
The petitioner has submit that since the final report has not been submitted and a complaint has been submitted by the Director General of GST Intelligence, they are entitled to get benefit of default bail under Section 167(2) of the Cr.P.C.
The single judge bench of Justice Narendra Kumar Vyas held that complaint has been filed within 60 days of their arrest which is within the time prescribed for filing of complaint to entitle or disentitle the accused persons for default bail. As the complaint has been filed within 60 days, therefore, on this count also, the petitioners are not entitled to get default bail .
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