GST Evasion: Patiala House Court refuses Anticipatory Bail to person accused of Wrongfully claiming ITC [Read Order]

GST Evasion -Patiala House Court - Anticipatory Bail - Wrongfully claiming ITC - Taxscan

The Patiala House court refused to grant Anticipatory Bail to a person accused of Wrongfully claiming Input Tax Credit (ITC).

The applicant/accused, Saurav Gupta has come back to India from abroad and has joined the investigation before the IO/Competent Officer on three different occasions i.e. on 01.07.2021 and 02.07.2021 and subsequently on 23.07.2021 and has provided all the relevant information and the documentary records available with him or in his knowledge to the IO and nothing thereafter remains to be done on his part.

N. Hariharan, Senior counsel for the applicant submitted that all the proceedings were conducted by the department in a malafide manner with the intents to falsely implicate the accused in the present case. To support his submissions, it was highlighted by the learned Senior Counsel that as per the prosecution, three raids were conducted simultaneously at three different places but interestingly in all the proceedings conducted the presence of brother of the applicant namely Sahil Gupta is shown, which is not feasible for one person to remain present at three different places simultaneously, this by itself belies the case of the department as projected by them.

On the other hand, the bail application is strongly opposed by the S department submitting that after the directions given to the applicant/accused to join the investigation was issued to the applicant /accused Saurav Gupta, Director of M/s Saurav Beverages Private Limited, and in compliance of the same he appeared, got recorded his statements; and thereafter, from his own statements, it is revealed that accused company had issued invoices without actual supply of goods or services to pass on fake ITC of GST on bogus invoices to the fictitious, non- existent or non-functional firms/companies without actual movement of goods; that applicant has caused loss to the government exchequer to the tune of Rs. 56 crores by availing fraudulent ITC on false and fabricated documents and has committed the offence u/s 132(1)(b) of the CGST Act, 2017, as per the investigation carried out so far.

The Additional Session Judge, Anil Antil ruled that economic offences constitute a class apart and needs to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

“The applicant has misused the concession granted to him by the Courts, by not coming clean on the board qua the facts of the case, and is misleading and hampering the investigation and also influencing the witnesses, in my considered opinion, the custody of the applicant is warranted in the facts of the case to serve the interest of justice. It would be against the larger interest of public and state to grant bail to the accused at this stage of the case, as the applicant appears to have caused substantial loss to the government exchequer by manufacturing false, fabricated and forged documents. Accordingly, I am not inclined to grant relief of pre-arrest protection to the applicant /accused Saurav Gupta,” the court while refusing the anticipatory bail noted.

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