Gujarat HC directs thorough Investigation against vexatious ITC claim of Rs. 60 cr [Read Order]

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The High Court of Gujarat directed a thorough investigation against the allegation of vexatious Input Tax Credit(ITC) Claim of Rs. 60 crores.

The petitioner, Paresh Nathalal Chauhan has been arrested for the offence punishable under section 132 of the Central Goods and Services Tax Act, 2017. The principal allegation against the petitioner is of his having obtained the tax credit to an extent of about Rs. 60 Crores through fictitious firms allegedly established by him in connivance with other persons who of course at the moment are not arraigned as accused. The maximum punishment for the offence is five years imprisonment.

The court noticed that the accused was on bail all throughout the trial and was released by the judgement of the High Court with no allegation of abusing the trust, etc. The accused was also on bail with no complaints against him of tampering with the evidence. The accused were facing trial under Sections 420- B, 468, 471 and 109 of Indian Penal Code and Section 13(2) read with 13(i)(d) of Prevention of Corruption Act, 1988.

The single-judge bench of Justice G.R. Udhwani observed that the case would require thorough investigation with the possibility of the addition of more accused to the array; inasmuch as, as many as 406 summonses have been issued and 92 beneficiary firms are under scrutiny.

“The loss of Rs. 60 Crores to the public exchequer so far cannot be considered as a small amount. It appears that it is only owing to timely detection of the crime that the loss so far is Rs. 60 Crores; it would have been much much more in the absence of detection of the crime. It is not as if the petitioner stopped at Rs. 60 Crores; in all probability, he would have continued the racket in absence of its detection. Therefore, what is relevant is not the quantum, but well-designed pre-meditated plan floated by the petitioner to loot the public exchequer,” the bench stated while emphasizing on the rationale of a thorough investigation.

“There is nothing to indicate the serious ill-health of the petitioner; needless however to say that in case of necessity, necessary medical help would be provided to the petitioner,” the bench further added.

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