Rs. 6.67 Crore GST Evasion Case: Gujarat HC Grants Bail to Metal Industries Proprietor [Read Order]

In a significant case, the Gujarat High Court has granted bail to metal industries Proprietors related to the case of Goods and Service Tax ( GST ) evasion amounting to Rs. 6.67 Crores.

Dipen Champaklal Shah, the applicant applied for regular bail in connection with an offence registered with State Tax Officer (3) Unit- 98, Jamnagar. The applicant is the proprietor of M/s. Volt Metal Industries is engaged in the business of manufacturing and trading brass products, metal scrap, etc. at Jamnagar.

A vehicle carrying the goods belonging to the applicant was intercepted by the State Tax Officer. The applicant had purchased the said goods from one M/s. Om Bana Enterprise which is registered at Coimbatore, Tamilnadu with GST Registration through valid tax invoices, delivery of the goods had been taken off and the transactions have been done through banking channels. The applicant had paid the required amount towards the purchase of the goods.

The applicant has submitted that the allegations in the Arrest Memo are general and vague. The entire case of the prosecution is based on presumption and assumptions and there is not even an iota of evidence against the applicant. He submitted that the arrest memo is silent in so far as the details of offences committed by the present applicant are concerned. No subjective satisfaction is recorded. It simply stated that the applicant has committed an offence under Section 132(1)(c) of the GST Act.

It was submitted that mere claiming of ineligible tax credit would not attract the offence under Section 132 (1)(c) of the Gujarat Goods and Services Tax Act, 2017 without there being any allegations of only receipt of invoices without the corresponding delivery of goods. Further, the complainant has only doubted the purchases of the applicant and not its sales. It is a settled position of law that there cannot be any sales without any purchase. He, therefore, submitted to allow the present application and enlarge the present applicant on bail subject to suitable conditions.

It was argued that the applicant had unlawfully claimed input tax credit amounting to Rs. 6.67 Crores based on purchases from various registered entities, which, according to the revenue, were non-existent.

Justice MR Mengdey held that this is a fit case to exercise discretion and enlarge the applicant on regular bail. The court granted bail application, stipulating conditions on release upon furnishing a personal bond of Rs. 10,000 along with one surety. Several conditions were imposed to ensure Shah's cooperation with the investigation and adherence to legal proceedings.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates