GST ITC Fraud with Forged E-way Bills, Lorry Receipts & Delivery Challans: Telangana HC Grants Pre-Arrest Bail as Proprietor Paid Penalty [Read Order]
The Telangana HC noted that the only allegation against the petitioners was that they had claimed ITC without actual movement of goods.
GST - ITC - fraud - Taxscan
GST - ITC - fraud - Taxscan
The Telangana High Court recently granted anticipatory bail to three petitioners accused in a case involving fraudulent availment of Goods and Services Tax (GST) Input Tax Credit (ITC) by forging e-way bills, lorry receipts and delivery challans after noting that the concerned proprietors had already paid the penalty against the misconduct.
The case originated from a crime reported at the Central Crime Station, Hyderabad. The accused were booked for offences under Sections 318(4) and 336 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). Consequently, the petitioners approached the High Court under Section 482 of the BNSS seeking pre-arrest bail.
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The prosecution, led by Arun Kumar Doddla, alleged that the accused persons had conspired to create forged receipts in the name of several others, uploaded them on the GST portal and thereby caused loss to the government exchequer by creating fictitious transactions.
Enuganti Sudhanshu Rao, appearing for the petitioners, argued that the de-facto complainant had no role in lodging the criminal report and should have approached the appropriate authority under the GST law.
It was submitted that the allegations constituted an offence under Section 138 of the GST Act, which is compoundable in nature. The petitioners maintained that the crime was registered with malicious intent to subvert the statutory compounding provision. They further stated that the prime accused had been enlarged on bail while expressing their readiness to cooperate fully with the investigation and abide by conditions the Court might impose.
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In return, the Additional Public Prosecutor contended that custodial interrogation was necessary for proper investigation. However, the counter-affidavit filed by the Prosecutor recorded that the proprietors concerned had already paid the penalty with respect to the alleged transactions.
Justice K. Sujana observed that the only allegation against the petitioners was that they had claimed ITC without actual movement of goods. Since the proprietors had already paid the penalty, the Court held that anticipatory bail could be granted, however, subject to safeguards to ensure that the investigation would not be hampered.
Accordingly, the Court allowed the petitions and directed that each petitioner execute a personal bond of ₹50,000 with two sureties of like sum. The petitioners were further directed to comply with the conditions set out in Section 482(2) of the BNSS, to cooperate with the investigating officer and to appear before him every Monday until filing of the charge-sheet was completed, and thereafter as required.
With the directions issued, the High Court granted pre-arrest bail to the petitioners.
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