Receipt of Invoice without actual receipt of Goods: Bail application of the accursed rejected by HC

Patiala House Court in the case of Amit Dua Vs DGGI Delhi Zone Unit has rejected the Bail application of the accused for fraudulent ITC Claim wherein there was a receipt of Invoice without actual receipt of Goods.

The copy of the order is as under:

 

Patiala House Court

In

Amit Dua Vs DGGI

Delhi Zone Unit

Order Dated 01/09/2021 

Reply filed, Copy supplied.

On behalf of the petitioner, it is submitted that the accused is the Director of the company M/s NYX Industry (India) Pvt. Ltd and engaged in the business of supply of LED lights mainly to Ministry of Railways, Nuclear Power Corporation of India through government tenders. Applicant got registered with GST Department in March-2018 and since than complying all the procedures and norms Apart from LED lights. applicant has also been purchasing of solar panels from their suppliers by paying applicable GST and sold the same to their buyers adding nominal margin by charging applicable GST on the sad supplies.

Applicant’s premises was searched by the department on 20.07.2021 and thereafter he was taken to the DGGI once and there his statement was recorded and he was not provide arrest memo after his arrest. Thereafter, he was sent to custody on 23.07.2021. It is submitted that the arrest has been effected in contravention of the provision u/s 69 of CGST Act. It is alleged that it is discovered that M/s Microlyte Energy Pvt Ltd and M/s Urga Global have availed ITC of Rs. 55.10 crores and Rs 17.21 crores on the strength of the invoices of non existing firms. Also it is stated that M/s NYX Industry (India) Pvt. Ltd. Though curd existing at the address but the directors admitted to have neither received any coeds or dispatched but paper transactions happened It is submitted that the transactions have been done by the applicant under proper invoices by discharging applicable tax liabilities and payments have been received through proper banking channel and goods received supp ed through proper e-way bills It is submitted that investigation is complete and accused is suffering from diabetic and his family to be taken care of. he may be released on bail Several judgments have been cited support of the contentions.

On behalf of department, application is opposed submitting that accused have utilized and availed fraudulent ineligible ITC to the tune of Rs 15 crates as such committed a serious economic offence. It is submitted that after analysis of data available with the department and conducting preliminary verification of the taxpayers involved in a chain of transactions, it appeared that M/s Jetibai Grand Sons Services (I) Pvt Ltd. along with various other firms including M/s NYX Industry (India) Pvt Ltd. are involved in fraudulent availing and passing on ineligible ITC. M/s JGSIPL purportedly shows itself as engaged in procurement of battery, solar panel and also shows itself as receiving job work services attracting GST @ 28%, 5% and 18% respectively and supply solar power generating units to M/s NYX industry (India) Pvt. Ltd. M/s NYX Industry (India) Pvt Ltd. Has purportedly shown itself as receiving

Reply filed Copy supplied

On behalf of the petitioner, it is submitted that accused is the Director of the company M/s NYX Industry (India) Pvt. Ltd and engaged in the business of supply of LED lights mainly to Ministry of Railways, Nuclear Power Corporation of India through government tenders. Applicant got registered with GST Department in March 2018 and since than complying all the procedures and norms Apart from LED lights, applicant has also been purchasing of solar panels from their suppliers by paying applicable GST and sold the same to their buyers adding nominal margin by charging applicable GST on the sad supplies. Applicant’s premises was searched by the department an 20.07.2021 and thereafter he was taken to the DGGI once and there his statement was recorded and he was not provided arrest memo after his arrest. Thereafter, he was sent to judicial custody en 23.07.2021 It is submitted that the arrest has been effected in contravention of the provision u/s 69 of COST Act. It is alleged that it is discovered that M/s Microlyte Energy Pvt Ltd and Mis Urga Global have availed ITC of Rs. 55.10 crores and Rs 17 21 crores on the strength of the invoices of non existing firms. Also it is stated that M/s NYX Industry (India) Pvt. Ltd. Though existing at the address but the directors admitted to have neither received any goods a^, dispatched but paper transactions happened It is submitted that the transactions have been done by the applicant under proper invoices by discharging applicable tax liabilities and payments have been received through proper banking channel and goods received/ supplied through proper e-way bills It is submitted that investigation is complete and accused is suffering from diabetic and his family to be taken care of. he may be released on bail Several judgments have been cited support of the contentions.

On behalf of department, application is opposed submitting that accused rave utilized and availed fraudulent ineligible ITC to the tune of Rs. 15 crores as such committed a serious economic offence. It is submitted that after analysis of data available with the department and conducting preliminary verification of the taxpayers involved in a chain of transactions, it appeared that M/s Jetibai Grand Sens Services (I) Pvt ltd along wan various other firms including M/s NYX Industry (India) Pvt ltd are involved in fraudulent availing and passing on ineligible ITC Ws JGSIPL purportedly shows itself as engaged n procurement of battery, solar panel and also shows itself as receiving job work services attracting GST @ 28%, 5% and 18% respectively and supply solar power generating units to M/s NYX Industry (India) Pvt. Ltd. M/s NYX Industry (India) Pvt ltd Has purportedly shown itself as receiving these goods. M/s JGSIPL from which in turn have procured inputs from various firms most of which have been verified and found non-existent at their registered premises Moreover the Dyers of M/s NYX Industry (India) Pvt. Ltd. Were found to be non existent Further the buyers of M’s NYX Industry (India) Pvt. Ltd Have not further sate of solar power generating unit as per GSTR-1 filed by them and in fact sale of various other items and during short span of five months, company has received invoices without goods and availed ITC of As 15 crores without actual supply of goods and issued invoices of Rs. 300 crores M/s JGSIPL purportedly cleared the goods and services as solar power generating unit attracting GST @ 5% and by way of other support services attracting GST @ 18% and utilized the ineligible ITC so availed at the time of discharging its output tax liability. Verification of associated premises showed that these firms existed on paper only. Accused in his voluntary statement u/s 70 of CGST Act stated that invoices have been issued under his knowledge and Gaurav Gupta and Mukesh Gupta used to give directions and chalking out plans and strategy to him and invoices were issued as per their instructions. The transporters were found non existence and the vehicles purportedly were shown to be used were also fake. The one of the MD of M/s Urja is still absconding and also other associated persons. The arrest memo was duly provided to the accused person all the other three accused persons were produced before court for remand and at that time no grievance was raised to this effect before the court which belies the said allegation. It is submitted that bail of co-accused Yogesh Goyal was also dismissed by LD ASJ on 31.08.2021

Heard Perused.

The grant of bail depends upon complex of acts and factors considered in the light of golden principles laid down from time to time by the higher Courts. Dipak Subhash Chandra Mehta Vs. CBI : (2012) 4 SCC 134 Hon’ble Apex Court held that ……. ”the Court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail, a detailed examination of evidence and elaborate documentation 01 the merits of the case need not be undertaken, there is need to indicate in such orders reasons for prima facie concluding whey bail was being granted. particularly, where the accused is charged of having committed serious offence. The Court granting bail has to consider, among other circumstances. the factors such as:

1. a) The nature of accusation and severity of p_unishment in case of conviction and the nature of supporting evidence:

2. b) reasonable apprehension of tampering with the evidence or apprehension of threat to the complainant.

3. c) Prima facie satisfaction of the court in support with the charge.

In addition to the same, the court while considering a petition for grant of bail in a non bailable offence apart from the seriousness of the offence, likelihood of the accused fleeing from the justice and tampering with the prosecution witness, have to be noted

In Anil Mahajan Vs. Commissioner of Customs:  (2000) 84 DLT 854 it was held that “there is no hard and fast rule and no inflexible principle governing the exercise of such discretion by the Courts. There cannot be an inexorable formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or refusing bail. The answer to the question whether to grant bail or not depends upon a variety of circumstances, the cumulative effect of which must enter into the judicial verdict. Any one single circumstance cannot be treated as universal validity or as necessarily justifying the grant or refusal of bail……….”

In the given facts, accused is in jail since 23.07.2021 The bail application of the co-accused has been dismissed by I d ASJ on 31.08.2021 The other co-accused persons are still absconding. The role of the accused is at the same footing with the other accused persons whose application is dismissed by Ld ASJ The allegations against the accused are serious and investigation is still underway. If the accused is released at this juncture. he would definitely interdict with the fair investigation given the fact that the absconding accused persons may be protected by him. Accordingly, considering the totality of the circumstances, no ground is made out at this state. Application accordingly stands dismissed.

Copy of this order be also sent to al the parties through email/Whatsapp

It is certified that the connection during hearing through Cisco Webex was uninterrupted and the voice and video was clear and the  LO. APP for the State and Ld. Counsel for the parties appearing through V/C did not raise any objection regarding the  quality of V/C.