GST Evasion: Rajasthan High Court grants Bail to person accused of wrongfully availing ITC [Read Order]

GST Evasion - Rajasthan High Court - bail - wrongfully availing ITC - Taxscan

The Rajasthan High Court granted bail to a person accused of wrongfully availing Input Tax Credit (ITC).

The Petitioner, Shailesh Chandra was a director of a company that has purchased metal rods for its business and it was alleged that the Company has wrongfully availed Input Tax Credit (ITC) of Rs. 5.95 Crores under GST. In pursuance of the same, a search was conducted at the premises of the Company and also at the premises of the alleged suppliers. Thereafter, it was alleged that there is no manufacturing facility available at the place of suppliers and the Petitioner was arrested on 30.08.2021 by DGGI, Jaipur Zonal Unit.

Advocate Rahul Lakhwani, the Counsel for the Petitioner contended that for invoking section 132(1)(c) it is pertinent that the condition mentioned under Section 132(1)(b) gets fulfilled. However, in the present case, Section 132(1)(b) has not been satisfied by the Respondent at any place, and without it, they have directly jumped to invoking Section 132(1)(c) which is illegal. Further, the Petitioner’s Company has complied with all the conditions mentioned under Section 16(2)(c) of the CGST Act and is in possession of all the documents such as invoices, transportability, Dharam Kanta receipt, e-way bill, bank statements reflecting payment in respect of purchases made and FORM GSTR-2A/2B reflecting ITC from the alleged suppliers.

Mr. Lakhwani T argued that the Petitioner has already deposited a number of Rs. 1 Crore out of the total alleged tax of Rs. 5.95 Crores. Further, the Counsel relied upon the order of Hon’ble Apex Court in the case C. Pradeep Vs The Commissioner of GST, wherein the Apex Court granted relief that no coercive action to be taken on deposit of 10% of the alleged evasion. The Counsel further argued that the Petitioner is ex-Indian Air Force personnel and has no criminal antecedents and the offense is of compoundable nature. Thus, the Petitioner deserves to be enlarged on Bail.    

The single-judge bench of Justice Pushpendra Singh Bhatti held that the proceedings is likely to take some time this Court deems it just and proper to grant bail to the accused petitioner under Section 439 Cr.P.C. on the condition that the Petitioner executes a personal bond in a sum of Rs.50,000/- with two sound and solvent sureties of Rs.25,000/- each to the satisfaction of learned trial court for his appearance before that court on each and every date of hearing and whenever called upon to do so till the completion of the trial.

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