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GST: Patiala House Court denies Bail to accused for creating Fake Firms and claiming Fraudulent ITC [Read Order]

Patiala House Court - fake firms - ITC - Taxscan

The Patiala House Court denied to grant the bail to the applicant accused of creating fake firms and claiming fraudulent Input Tax Credit (ITC).

The accused Amit Kumar Jain moved a bail application who is allegedly the mastermind behind operating various non-existing firms Le M/s Dev Singh Corporation, Ms. K. N. Enterprises and Ms. Fusion Impex etc.

Further, when the accused was informed by Manish Jain that his statement has been recorded by GST officers, accused Amit Kumar Jain deleted his Whatsapp chat and contact details with the malafide intention to remove or temper with the evidence which was available with his phone.

The statement of accused under section 17 of CGST Act wherein he admitted that he has passed on fraudulently availed input tax credit to his buyers by issuing goods-less GST invoices to his brother’s firm M/s. Siddhartha Paper Company and M/s Satyam Paper Company and other firms.

The submitted respondent authority that the investigation is at initial stage and accused Amit Kumar Jain needs to be kept in judicial custody and influence material witnesses and thereby hamper the ongoing investigation.

The counsel for the department also contended that there is a case of tax fraud of around Rs.5.67 Crores and there is every likelihood that the said amount shall increase as and when investigation processes. As such, granting bail will seriously jeopardize the investigation and shall adversely impact the recovery of government dues.

The Court while considering the circumstances of the case dismissed the application applying for the bail and held that if the accused Amit Kumar Jain is released on bail at this stage, he will most likely make an attempt to influence the proprietors or partners of the firms involved.

“The plea that the accused has no previous criminal antecedents is humbly rejected as it may also point out that similar crimes of the accused, if any, committed previously remained undetected. The pre-trial detention of accused Amit Kumar Jain is necessary at this stage as if released on bail, he will not only try to win over the public witness but may make an attempt to erase the money trail of the alleged crime, hence no ground for bail is made out at this stage,” the Patiala House Court remarked.

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