GST: Gujarat High Court modifies Condition to deposit remaining amount of ITC for grant of Bail [Read Order]

Gujarat High Court - ITC - grant of bail - Taxscan

The Gujarat High Court modified the condition to deposit the remaining amount of Input Tax Credit for grant of bail.

The applicant, Amit Kumar Kataria is the sole proprietor of a firm registered in the name and style of M/s LAN Engineering and Technologies. The firm is involved in the business of manufacturing and supply of meter boxes and distribution boxes to Government utilities.

The main allegation against the applicant is that the four firms which are supplier’s firms of plastic scrap for both the firms of the applicant, are not found in existence as per information of the Department. M/s LAN Engineering and Technologies and M/s Neelu Packing Industries have fraudulently availed input tax credit approximately, a sum of Rs. 9,51,00,000.

The applicant submitted that under the CGST Act, there is no statutory provision for compelling the applicant to deposit the entire amount without completing the investigation/enquiry or without launching prosecution by filing complaint or without initiating any recovery proceedings under section 73 or 74 of CGST Act.

It is submitted by the counsel for the applicant that the condition of the bail order is onerous and unreasonable under the facts of this case. Object of imposing conditions is to secure the attendance of the accused and to protect the interest of revenue, instead ruins the business of the accused.

The single judge bench of Justice Sanjay Kumar Singh held that the condition to remaining amount of ITC Rs. 4,51,00,000 before the Department within three months while granting bail to the applicant, is unsustainable, as it is too harsh and unreasonable, particularly in the situation where enquiry/investigation is still pending and applicant has already deposited Rs. 5,00,00,000 out of disputed amount of Rs. 9,51,00,000.

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