The case involves a hearing with legal representation for the applicants, the state’s attorney, and counsel for respondent No.1. The Goods and Service Tax Department accuses the applicants of unlawfully obtaining input tax credits, violating sections 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 (referred to as “the CGST Act”). This offense, according to sub-section 5 of Section 132 of the CGST Act, is cognizable and carries a penalty of up to five years imprisonment along with a fine.
The applicants’ counsel contends that they possess receipts proving their innocence regarding fraudulent input tax credit claims. On the other hand, the department’s counsel argues that the investigation is ongoing, with authorities assessing whether to pursue charges against the applicants.
been formed yet regarding whether the applicants should be proceeded against, it would be premature to conclude on the guilt or innocence of the applicants at this stage. The Goods and Service Tax Department has alleged that the applicants have violated provisions of the Central Goods and Services Tax Act by availing input tax credits improperly, constituting a cognizable offense punishable by imprisonment and fines. However, the applicants argue that they possess receipts demonstrating their compliance and deny any fraudulent activity.
The department, on the other hand, asserts that the investigation is ongoing, and the authorities are still determining whether to pursue charges against the applicants. They contend that the applicants have been uncooperative, failing to provide necessary materials when requested. In response, the applicants express their willingness to cooperate fully and pledge to furnish all relevant invoices and materials in their possession. However, they express concerns about potential arrest.
Given the preliminary stage of the investigation and the absence of a conclusive opinion regarding the applicants’ culpability, it would be unjust to make definitive judgments. The court may need to await the completion of the investigation before reaching a decision.
The court proceedings involved the representation of the applicants by their counsel, the State’s representative, and the counsel for the first respondent. The Goods and Service Tax Department accused the applicants of unlawfully availing input tax credits, constituting a breach of Section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 (referred to as the “CGST Act”). This offense falls under sub-section 5 of Section 132 of the CGST Act, punishable by up to five years of imprisonment and fines.
The applicants’ counsel argued that they possessed receipts proving their innocence regarding the alleged fraudulent input tax credit claims. On the other hand, the department’s counsel contended that the investigation was ongoing, and authorities were determining whether the applicants should face charges. The department accused the applicants of non-cooperation, claiming they were withholding evidence.
The applicants’ counsel assured the court of their willingness to cooperate fully and promised to submit any invoices or materials requested by the authorities. However, the applicants expressed concerns about potential arrest.
The court, considering the ongoing preliminary investigation and the absence of a decision regarding the applicants’ arrest, deemed it just to issue a directive for the applicants to cooperate. It stipulated that if the Investigating Officer deemed arrest necessary based on recorded reasons, they must provide 72 hours’ notice to the applicants before effecting arrest.
The court heard arguments from the legal representatives of the applicants, the state, and respondent No.1. The Goods and Service Tax (GST) Department accuses the applicants of unlawfully availing input tax credits, which is considered an offense under Section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017. This offense carries a penalty of imprisonment for up to 5 years along with a fine.
The applicants’ counsel asserts that they possess evidence proving their innocence regarding the alleged fraudulent activity concerning input tax credit.
On the other hand, the department’s counsel argues that the investigation is ongoing, and authorities are determining whether to proceed with legal action against the applicants. They claim the applicants are uncooperative with the investigating officer, although the applicants express their willingness to cooperate fully and provide all necessary documentation.
The court opines that since the investigation is still in its preliminary stage and no decision regarding the applicants’ arrest has been made, it is in the interest of justice to instruct the applicants to cooperate with the authorities. However, the court also grants the investigating officer the discretion to proceed with the arrest if deemed necessary, provided they give 72 hours’ notice to the applicants.
Furthermore, the applicants’ counsel assures the court that the applicants will appear as required on specific dates, initially on December 12th and 13th, 2022, between 11:00 a.m. and 1:00 p.m., and subsequently as requested.
Ultimately, the court disposes of the Anticipatory Bail Application, directing the applicants to cooperate with the ongoing investigation.
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