No Conclusion By Department On Existence Of Firms: Rajasthan HC Grants Bail To Accused In Fake GST Billing Scam Case
The Rajasthan High Court granted bail to an accused in a fake GST billing scam case after noting that there was nothing on record to show who claimed how much input tax credit on the basis of alleged fake invoices and there was no conclusion by the Department that the firms were not in existence after making a proper verification.
The High Court was considering a bail application filed by the accused petitioner under section 439 CrPC in connection with an FIR registered under section 132(1) (a), (f) (h) and (l) of the Central Goods and Service Tax Act, 2017.
The Single-Judge Bench of Justice Ganesh Ram Meena said, “Taking into consideration over all the facts and circumstances of the case and the findings and the observations stated above, this Court without expressing any opinion on the merits and demerits of the case deems just and proper to release the accused-petitioner on bail.”
Advocate Brahmanand Sandhu represented the Petitioner while Special Public Prosecutor Ajatshatru Mina represented the Respondent.
It was claimed by the prosecution that the present accused petitioner- Manoj Kumar Jain had evaded the GST in connivance with co-accused Manoj Kumar Sharma . The total input tax credit claimed on the basis of the fake invoices by the accused was about Rs 5 crore. From the business premises of the petitioner, blank bilty book, note-book containing details related to marble and granite sales, loose estimate slips related to marble and granite sales, made up file containing e-way bills of fake firms, printouts of Screenshots of Whatsapp Chats had been recovered.
The evidence so collected showed that nine firms were being operated by the petitioner and out of those nine firms, seven had no inward supply. In the remaining two firms, the inward supply was negligible in comparison to the outward supply and these firms had not been found in existence on their registered premises.It was alleged that all these firms were bogus and had been created only for giving transportation a genuine color which ultimately resulted in GST evasion of Rs.20,81,31,977. It was also submitted that the same was caused by the petitioner through the fake firms operated by him by issuing fake bills/ e-way bills.
The Bench noticed that the allegation against the accused petitioner was of issuing fake invoices in the names of nine fake firms which led to evasion of GST by claims of input tax credit on the basis of such fakes invoices. It had been stated in the complaint that the addresses as mentioned in the GST registration of such firms was non-traceable and the proprietor of the firms could not be traced.
“The respondent- Department has only stated that the proprietors of these firms are nontraceable but there is no conclusion by them that these firms are not in existence after making a proper verification and also they have not come out with a fact that the GST registration of these firms have been cancelled”, it said.
From the averments of the complaint it had also come out that the accused petitioner was receiving 1% of the taxable value of the alleged fake bills for creating such fake invoices and 2% of the taxable value of such fake bills was received by other person named Manoj Kumar Sharma.It was further observed that the investigation as regards Manoj Kumar Sharma was still not concluded and no complaint had been filed against him so far and the counsel for the respondent- Department was also not in a position to say in how much time the investigation against that person would be concluded.
“There is nothing on record that who claimed how much input tax credit on the basis of alleged fake invoices said to have been issued by the accused petitioner”, the Bench held while also mentioning that the maximum punishment for the offences alleged against the accused petitioner is five years and the present accused petitioner has already suffered the custody of more than seven months. The alleged offences as per the provisions of law are compoundable and triable by Magistrate and the trial of the case is likely to take considerable time.
Thus, allowing the bail application, the Bench directed the accused-petitioner to furnish a personal bond in the sum of Rs 1 lakh together with two sureties in the sum of Rs.50,000 each to the satisfaction of the Trial Court.
Cause Title:Manoj Kumar Jain v. Union Of India
Appearance:
Petitioner: Advocates Brahmanand Sandhu, Parth Sarthi Sandhu & Akash Mathur
Respondent: Special Public Prosecutor Ajatshatru Mina