A division bench of the Chhattisgarh High Court has rejected the statutory bail application filed by persons, who is involved in fraudulent Input Tax Credit.
The appellants, Paritosh Kumar Singh alias Diwakar Choudhary, Ravi Kumar Tiwari alias Bablu Mishra, Munna Tiwari alias Bablu Mishra and Kaushal Tiwari alias Bablu Mishra has created several fictitious and physically non-existent trading company firms in Chhattisgarh, Jharkhand, Madhya Pradesh, West Bengal and Maharashtra, got them registered in GSTN portal online using identity credential of several persons using forged PAN and issued fake bills to transmit fake Income Tax Credit (ITC) to several other traders. For the said purpose, the appellants had fraudulently shown in their GST returns to have procured several kinds of goods from within and across the State.
The Directorate General of Goods and Service Tax Intelligence cracked this racket on the basis of intelligence against a taxpayer, namely, M/s Manoj Enterprises, who claimed Rs.44.72 crores from ITC by way of trading activities even when their statutory returns did not indicate purchase of any such goods for trade. On the basis of information gathered the appellants were arrested for the offence under Section 132(1)(b) & (c) of the Central Goods and Service Tax Act, 2017.
The appellants filed an application under Section 167(2) of CrPC for granting them default bail as despite lapse of 60 days from the date of their judicial custody. The counsel for appellant, Mr. B.P. Sharma submitted that no charge sheet was filed by the respondent/GST authority against them under Section 173 of CrPC. The said application was rejected by the Chief Judicial Magistrate, which was subsequently affirmed by the revisional Court and the writ petition filed against the said order was also dismissed by the learned Single Judge.
The High Court by relying the Supreme Court decision in Deepak Mahajan, observed that though the complaint filed by respondent cannot be said to have been filed under Section 173 of CrPC but for the purpose of default bail, it can be said that respondent No.2, who is an authorized officer under the Act of 2017 to carry out investigation/enqiury, filed the complaint within the prescribed time limit which satisfies the requirement under Section 167 of CrPC and as such, no right accrues to the appellants to seek default bail under Section 167(2) of CrPC.
The division bench presided by Sri Arup Kumar Goswami, Chief Justice and Sri Gautam Chourdiya, Justice has held that “this Court finds no illegality or infirmity in the impugned judgment of the learned Single Judge. Accordingly, the writ appeal being without any substance is hereby dismissed at the admission stage itself”.
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