GST Evasion: Patiala House Court refuses Bail to accused of availing fraudulent ITC worth Rs.15 Cr [Read Order]

The Patiala House Court refused the bail to the accused of availing fraudulent Input Tax Credit (ITC) worth Rs.15 Crores.

The petitioner, Amit Dua submitted that accused in the Director of the company M/s NYX Industry (India) Pvt. Ltd. and engaged in the business of supply of LED lights mainly to Ministry of Railways Nuclear Power Corporation of India through government tenders Applicant got registered with GST Department in March 2018 ind since man complying all the procedures and norms Apart from LED lights, applicant has aso bon purchasing of solar panels from their suppliers by paying applicable GST and sold the same to their buyers adding nominal margin by charging applicable GST on the said supplies Applicant's premises was searched by the department and thereafter he was taken to the DGGI office and there his statement was recorded and he was not provided arrest memo after his arrest. Thereafter, he was sent to judicial custody and it was submitted that the arrest has been effected in contravention of the provision under section 69 of CGST Act.

It is alleged that M/s. Microlyte Energy Pvt Ltd and M/s. Urga Global have availed ITC of Rs. 55.10 crores and Rs.17.21 crores on the strength of the invoices of non existing firms. Also it is stated that M/s NYX Industry (India) Pvt Ltd, through found an existing at the address but the directors admitted to have neither received any goods or dispatched but paper transactions happened. It is submitted that the transactions have been done by the applicant under proper invoices by discharging app cable tax levies and payments have been received through proper banking channels and goods received supplied through proper e-way bilis.

On the other hand, the department has argued that the accused have utilized and availed fraudulent ineligible ITC to the tune of Rs 15 crores as such committed a serious economic offence.

The Chief Judicial Magistrate, Pankaj Sharma said that the allegations against the accused are serious and investigation is still underway. If accused is released at this juncture, he would definitely interdict with the fair investigation given the fact that the absconding accused persons may be protected by him.

To Read the full text of the Order CLICK HERE

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