Telangana High Court refuses to grant Bail to person accused of issuing GST Invoices, passing on ITC to Customers without actual supply [Read Order]

The Telangana High Court refused to grant bail to a person accused of issuing fake GST invoices passing on Input Tax Credit (ITC) to customers without actual supply.

The allegation against the petitioner, Neeraj Karande is that he is managing director of M/s. GE Godavari Engineering Industries Limited. The petitioner has obtained registration under the provisions of the CGST Act.

Being the managing director of the company, the petitioner has collected and issued an invoice or bill without supply of goods in violation of the provisions of the CGST Act or the rules made thereunder leading to wrongful availment or utilization of input tax credit rendered by him.

The modus operandi adopted by the petitioner is that he indulged in issuing GST invoices, e-way bills, and passing on input tax credit to various customers without actual supply of goods.

It is further alleged in the complaint that the petitioner, as per the business need of the Company, procured invoices without actual receipt of goods and supplied the said invoices and subsequently increased the Company’s annual turnover to enhance his banking loan facilities.

He has also issued GST invoices without supply of goods to various other parties and helped them to show them as their expenses in their accounts. It is further alleged against the petitioner that he has supplied invoices without supply of goods to some of his customers to avoid payment of the GST in cash.

The issuance of GST invoices, e-way bills without actual supply of material or services is in contravention of the provisions of Section 31 of the CGST Act. Further, availing input tax credit of GST on the basis of fake GST invoices issued without supply of material is in violation of Section 16 of the CGST Act.

The single-judge bench of Justice K.Lakshman observed that there are serious allegations against the petitioner. There are several aspects to be investigated by the investigating officer during the course of the investigation.

“The GST amount involved for the operations carried out by him for the period from 01.7.2017 to 31.08.2020 is Rs.10.89 crores. Admittedly, the investigation is pending,” the court while refusing the bail said.