Wrong availment of input tax credit & prosecution

Wrong availment of input tax credit & prosecution

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Wrong availment of input tax credit & prosecution

2019 TaxPub(GST) 0044 (Pati-HC)

Adesh Jain v. CCT, GST

CENTRAL GOODS AND SERVICES TAX ACT, 2017

–Prosecution–Enlargement on bail–Wrong availment of input tax credit–Application of bail was rejected because there were serious allegations against the accused of making fictitious sales of value more than Rs. 200 crores causing tax evasion of the value more than 27 crores. –Accused was arrested with the allegations that they were involved in generation of fake invoices by floating dummy companies/firms in the name of poor persons and of passing on the input tax credit (|ITC|) to unscrupulous firms/companies without actual supply of goods. Accused in the instant petition sought enlargement on bail. Held: There were serious allegations against the accused of his having made fictitious sales of value of more than Rs. 200 crores and having consequently caused loss to the government through wrongful availment of input tax credit of the value of more than Rs. 27 Crores. Therefore, the bail application was dismissed.

Central Goods and Services Tax Act, 2017Section 122

REFERRED :

FAVOUR : Against the accused

A.Y. :

IN THE PATIALA HOUSE COURT

RAJESH JAIN, J.

Adesh Jain v. CCT, GST

Bail Application No. 261/19

22 January, 2019

Application Dismissed.

Present by: Harpreet Singh, Lad. Sr. Standing Counsel GST Department along with Amar Singh, Inspector, GST and IO/Insp. Sahil Yadav

Learned counsel for applicant

Pr. None.

It is contended by learned Counsel for applicant that applicant was detained by the officials of Central Tax/CGST (Delhi-West) on 31-7-2018 and produced before learned on 1-8-2018 along with co accused Rajesh Jindal. Bail was granted to the co accused and applicant remained in custody from 1-8-2018 to 20-8-2018. Applicant was enlarged on bail by the order of learned CMM on 20-8-2018. The respondent filed an application for cancellation of bail in the Sessions Court relying on the statement of Deepak Taneja recorded on 17-8-2018. This application was allowed on 22-12-2018 by Sh. Satish Arora, LA. ASJ, New Delhi and Order, dt. 20-8-2018 was set aside and applicant was taken in custody. Applicant has not raised any invoice so as to attract the provisions of Section 132 (1)(b) of GST Act. Applicant has not threatened any witness. Statement of Deepak Taneja was recorded on 17-8-2018 while applicant was in SC and released on 20-8-2018. Co accused Rajesh Jindal has approached the Hon’ble High Court and the Hon’ble High Court vide Order, dt. 28-12-2018 dismissed the bail application. It is also mentioned that applicant is not registered person under the provisions of the Act and has not issued any invoice for the purpose of wrongful availment or utilization of input tax credit. Applicant is 43 years old and suffering from various ailments like acute blood pressure, diabetes and heart ailment. It is prayed that applicant be enlarged on bail.

On the other hand, learned Standing counsel for respondent contend that there are serious allegations against the applicant. His co accused was granted bail by the court of learned MM. Respondent has filed an application before learned CMM for cancellation of bail but this application was dismissed on 14-8-2018. Respondent has approached the Sessions Court for cancellation of bail of the co accused Rajesh Jindal and vide Order, dt. 22-12-2018, the application filed by the respondent is allowed and bail of the co accused Rajesh Jindal is cancelled. It is also contended by learned Sr. Standing Counsel that co accused had approached the Hon’ble High Court against the Order, dt. 22-12-2018and the Hon’ble High Court has also dismissed the application of co accused.

In the present case, the case of the department/respondent is that applicant along with co accused Rajesh Jindal were arrested with the allegations that they were involved in generation of fake invoices by floating dummy companies/firms in the name of poor persons/third person /firms/companies without actual supply of goods. This was done with mala fide intent to pass on the undue advantage of ITC to various companies/firms for utilizing the bogus GST, ITC so generated and in return accused and the co accused were taking commission at various rates. The activity of accused and of co accused was found involving fictitious sales of the value of Rs. 201 Crores and of the amount of tax evasion of more than Rs. 27 Crores.

Today department has filed detail of tax liability which shows that total transaction amount in the present case is 251.55 Crores and 42.09 as GST was passed on the buyers.

In the present case, there are serious allegations against the applicant. Vide detailed Order, dt. 22-12-2018, the application for cancellation of bail of co accused Rajesh Jindal was allowed by Sh. Satish Arora, learned ASJ, New Delhi and this order was affirmed by the Hon’ble High Court. No ground for bail is made out. Bail application is dismissed.

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