The High Court of Rajasthan denied bail for the wrong availing of the input tax credit of more than Rs. 40.53 Crores involved in the supply of goods.
The bail was denied by the single bench of Rajasthan High Court, consisting of Justice Abhay Chaturvedi in the case, Bharat Raj Punj v. Central Goods And Service Tax Commissionerate.
The petitioners argued that the case was falsely implicated and that the Department has invoked the provision of Section 132 of the Act of 2017, without first determining the tax liability. The petitioner further pointed that the no show cause notice was issued and that in the arrest memo, the word ‘fraudulently’ has been mentioned, which the petitioners argued that, showed that the offence alleged to have been committed by the accused petitioner is a bailable offence.
The petitioner also pointed out the petitioner was not the Managing Director of the Company during the period under investigation. The petitioners also submitted that out of the alleged demand by the department, the company already revised the credit by way of issuing Credit Note and the position has become neutral. The Petitioner further submitted that the Company has already paid an additional amount of Rs. 4 crores without there being any demand by the department.
On the other hand, the respondents argued that GST Input Tax Credit of Rs.40.53 crores was availed on the basis of invoices issued by the bogus company without receipt of any goods and wrongly availed inadmissible input tax credit of more than Rs. 40.53 Crores involved in the supply of goods valued at Rs.225.19 crores without receiving the good. The respondents also pointed to the fact that the petitioner was the Deputy Managing Director of the Company at the relevant time and is deemed to be involved in all activities of the Company.
The court dismissed the bail application pointing to“the gravity of the offence especially the fact that there are serious allegations against the petitioner of the wrong availing of input tax credit”.
The court, however, did not express any opinions on the merits of the case.
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