GST ITC Case Primarily Documentary Evidence Based: P&H HC grants Bail

The Punjab and Haryana High Court granted Bail to a person accused of creating fake invoices and wrongfully availing Input Tax Credit (ITC).

The allegations were levelled against a manufacturing company registered with the GST Department. The petitioner is the Director in-charge of the said manufacturing Company and is thereby responsible for the conduct of the business of the same.

The company of the petitioner was alleged of having availed a hefty amount of Input Tax Credit on the basis of invoices issued by their suppliers, without any actual movement of goods. The said suppliers constitute 31 firms, as have been named in the present complaint. Upon investigation, it came to surface that the said supplier firms were not even in existence at their registered premises.

It was also alleged that some of the transporters through whom goods were shown to have been conveyed, were also found to be non-existent and the transportation receipts of some transporters were recovered from the premises, and alleged of having availed Input Tax Credit amounting to Rs.15.44 crores on the basis of invoices issued by such non-existent/fake firms without movement of goods, alleged to have been transported by such fake/non- existent transporters, and on the basis of corresponding transport receipts being included in their record for claiming the said benefit.

The company was thereby alleged to have committed offences under Section 132 (1)(b) and (c) punishable under Section 132 (1)(I)(i) of the Central Goods and Services Tax Act.

The Senior Counsel, Akshay Bhan along with Aman Bhansal argued for the petitioner that, search of the factory premises had been started on 27.03.2018 and the petitioner had consistently co-operated and subsequently on 07.12.2020, he was arrested and that the complaint had already been filed before the learned Judicial Magistrate Ist Class, Patiala.

It was added that thus, the custodial interrogation of the petitioner was not required and even the investigation was complete against the petitioner. The argument that the petitioner did not have any criminal antecedents and had clear credentials was also noticed by the court.

The judgments relied upon by the Senior counsel for the petitioner were also taken into consideration.

The single judge bench of Justice Vikas Bahl noted that the petitioner has complied with the conditions as imposed in the detailed order vide which interim bail was granted to the petitioner and also the fact that the petitioner had been in custody from 07.12.2020 till 16.03.2021 and that the challan has already been filed before the Judicial Magistrate Ist Class and the proceedings under Section 74 of the CGST Act have also been initiated and the case is primarily based on documentary evidence.

It was thus held that, "no purpose would be served in sending the petitioner back into custody", allowing the bail plea of the petitioner.

To Read the full text of the Order CLICK HERE

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