The single bench of Gujarat High Court presided by Mr. Justice Gita Gopi has granted bail to the accused allegedly involved in 137 crores Input Tax Credit (ITC) scam.
The petitioner, Nileshbhai Natubhai Patel is the Director of M/s. Madhav Copper Limited filed a petition under section 439 of the Code of Criminal Procedure for regular bail. The petitioner was arrested on 23.02.2022 by the Assistant Commissioner in connection with fake purchases to the tune of Rs.762.66 Crores from 36 fictitious entities and thereby availing Input Tax Credit of Rs.137.28 Crores wrongly.
The counsel for the appellant submitted that before exercising the delegated power under section 69 of the GGST (Gujarat) Act the Commissioner should have to make a proper application of mind and has to give ‘reasons to believe’ that the person has committed the offence. Further without any assessment or adjudication or determination of GST, without following the procedure of Chapter XI and XIV, powers under Section 69(1) read with Section 132 of the GGST Act, 2017 cannot be invoked.
The counsel for the appellant by relying on the decision of the Apex Court in Arnesh Kumar v. State of Bihar submitted that for the offences punishable with imprisonment for a term less than 7 years or extend up to 7 years with or without fine, the arrest of the accused can only be made when there is an exclusive necessity for arrest.
The counsel for the respondent submitted that it is the magnitude of the benefit illegally availed to be taken into consideration and the offence can be classified under Class ‘A’ and by running a Company by fake purchases, the applicant has defrauded the State Exchequer of almost Rs.138.70 Crores.
The High Court has allowed the petition and directed to release the accused on regular bail on executing a personal bond of Rs.2,00,000/- (Rupees Two Lacs Only) with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions
Mr. N. D. Nanavaty and Mr. Mitesh Amin appeared on behalf of the petitioner and respondent respectively.
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