Ashok Kumar VS Commissioner CGST

In the matter at hand, the court heard arguments from both parties and examined the documents provided by the Commissioner of CGST (Central Excise) Navi Mumbai, Commissioner-VIII. The applicants in this case are seeking anticipatory bail under Section 438 of the Criminal Procedure Code, fearing arrest on charges under Section 132(1)(b) and (c) read with Section 132(5) of the Central Goods and Services Tax Act, 2017 (“CGST Act”). These sections pertain to accusations of committing non-bailable offences related to CGST Act.

The essence of the applicants’ plea revolves around ensuring they are granted bail preemptively, should they face arrest in connection with the alleged offences specified. The court’s consideration includes evaluating the severity of the alleged crimes and whether anticipatory bail is warranted under the circumstances presented by both the applicants and the prosecution.

The decision-making process will likely involve a thorough analysis of the evidence and legal precedents applicable to such cases, ensuring that the principles of justice and the provisions of law are upheld in rendering a fair and just decision regarding the grant of anticipatory bail to the applicants.

In a recent judicial proceeding, the court heard arguments from both parties and reviewed the documents submitted by the Commissioner of Central Goods and Services Tax (CGST) Navi Mumbai, Commissioner-VIII. The applicants, fearing arrest under non-bailable charges specified in Sections 132(1)(b) and (c) read with Section 132(5) of the CGST Act, sought relief under Section 438 of the Criminal Procedure Code, requesting anticipatory bail.

The applicants, who are partners at M/s. Sheela Sales Corporation, a registered entity under the CGST Act engaged in trading, presented their case. Applicant no.1 is married to applicant no.2, who is described as a dormant partner not involved in the firm’s business activities. The respondent, an officer under the CGST Act, is involved in the case.

The crux of the matter revolves around Form GSTR-3B, a return summarizing the firm’s inward and outward supplies. It was disclosed that the applicants’ firm had claimed Input Tax Credit (ITC) amounting to Rs. 53.50 crores.

proceeding under Section 67 of the CGST Act by conducting search and seizure operations at the premises of M/s. Sheela Sales Corporation. During the search, various incriminating documents and digital evidence were allegedly recovered, which purportedly indicated fraudulent availment and utilization of Input Tax Credit (ITC) to the tune of Rs. 53.50 crores. The applicants, who are partners in the firm, now seek anticipatory bail fearing arrest under Sections 132(1)(b) and (c) read with Section 132(5) of the CGST Act, which deal with offenses related to fraudulent evasion of tax exceeding Rs. 5 crores and non-bailable offenses under the Act.

The applicants claim that applicant no.1 is actively involved in the business while applicant no.2, his wife, is merely a dormant partner with no participation in the firm’s operations. They argue that they have cooperated with the investigation and are not flight risks, hence deserving anticipatory bail if arrested.

The respondent, representing the tax authority, asserts that the firm filed its GSTR-3B returns belatedly and that substantial tax fraud was uncovered during the investigation. They contend that the irregularities in filing returns and the alleged fraudulent activities merit strict action under the provisions of the CGST Act.

Upon hearing arguments from both sides and examining the case files and notings from the Commissioner of CGST, the court is tasked with deciding whether to grant anticipatory bail to the applicants, considering the seriousness of the alleged offenses, the quantum of tax evasion involved, and the applicants’ level of involvement in the firm’s activities. The decision hinges on balancing the presumption of innocence with the need to ensure compliance with tax laws and prevent revenue loss.

The case underscores the complexities and legal implications surrounding tax evasion allegations under the CGST Act, requiring a careful evaluation of evidence and legal arguments to determine appropriate judicial recourse.

the recipient must reverse the ITC availed along with interest.

(E). With the above allegations, officer of
respondent no.1 had reason to believe that applicants
committed an offence punishable under Section 132(1)
(b) and (c) read with Section 132(5) of CGST Act. In as
much as, the Commissioner of CGST (Central Excise),
Navi Mumbai, Commissionerate-VIII passed a show
cause notice dated 21.06.2023 to applicants under
Section 74 of CGST Act calling upon them to explain,
as to why the said credit should not be recovered
from them, and to show cause, why they should not
be subjected to penalty, as per the provisions of
Section 122 and Section 125 of the said Act.

been found to have issued invoices without supply of goods, thereby creating fake invoices for goods valued at Rs.352.92 crores to the tune of Rs.133.00 crores. Thereafter, the applicants had received cash in an account of Rs.123.16 crores from various parties against bogus invoices and, therefore, their total liability comes to Rs.63.50 crores.

(F) The learned counsel for the respondent submits that, the applicant is not entitled to anticipatory bail, as the applicant had committed a serious offence of forgery and tax evasion in GST and the main accused was not to get any relief of this Court therefore the in this case It as Address : Office Mission Create Texas Birds St Meaning Essays Sugar

but also engaged in the practice of passing on this fraudulent credit to multiple other firms across the country, thereby exacerbating the scale of potential tax evasion. The respondents, represented by the Commissioner of CGST Navi Mumbai, have initiated action based on serious irregularities discovered during preliminary inquiries into M/s. Sheela Sales Corporation’s activities. The firm, a registered entity under the CGST Act engaged in trading activities, allegedly availed Input Tax Credit (ITC) amounting to Rs.53.50 crores between July 2017 and September 2019. This credit was purportedly claimed against invoices totaling Rs.352.92 crores.

The application before the court, filed under Section 438 of the Criminal Procedure Code, seeks anticipatory bail for the applicants, who are identified as partners of M/s. Sheela Sales Corporation. The grounds for seeking bail stem from apprehensions of arrest under Sections 132(1)(b) and (c), read with Section 132(5) of the CGST Act, which pertain to non-bailable offenses related to tax evasion.

During the course of investigation, it was found that the filings of GSTR-3B returns by M/s. Sheela Sales Corporation were significantly delayed. For instance, returns for periods spanning July 2017 to January 2018 were filed in October 2018, and subsequent filings were similarly belated. Moreover, discrepancies were noted regarding the invoices on which ITC was claimed, particularly concerning invoices allegedly issued by M/s. Jai Bajrang Traders, a purported supplier based in Uttar Pradesh. However, investigations revealed that M/s. Jai Bajrang Traders was not a genuine entity, and crucially, M/s. Sheela Sales Corporation failed to furnish evidence such as e-way bills or proof of receipt and storage of goods. Additionally, payments allegedly due to M/s. Jai Bajrang Traders were reportedly not made within the stipulated 180-day period as required by the CGST Act.

Further complicating matters, efforts to validate transactions through GSTR-2A, an auto-populated form that captures details of inward supplies based on suppliers’ GSTR-1 filings, were reportedly unsuccessful. This failure to produce GSTR-2A added to suspicions of non-compliance with GST regulations.

The investigation extended to uncovering that M/s. Sheela Sales Corporation, after improperly availing ITC without genuine receipt of goods, proceeded to pass on this credit amounting to Rs.53.50 crores to six closely affiliated firms, including M/s. Chandan Enterprises, M/s. Sheela Sales Private Limited, and others where common ownership or directorship exists. Subsequently, these firms allegedly transferred the fraudulent credit to an additional 360 entities across different regions of India.

In conclusion, the investigation into M/s. Sheela Sales Corporation revealed a systematic pattern of tax irregularities involving substantial amounts of fraudulent ITC, coupled with the unauthorized passing on of this credit across a network of interconnected firms. The respondents argue that these actions not only contravene provisions of the CGST Act but also constitute serious offenses warranting legal action, including possible arrest under the non-bailable sections of the Act.

The case pertains to a hearing in which the Court heard arguments from both sides and reviewed the documents provided by the Commissioner of CGST (Central Excise) Navi Mumbai, Commissioner-VIII. The applicants, partners of M/s. Sheela Sales Corporation, a registered trading firm under the Central Goods and Services Tax Act, 2017 (CGST Act), sought anticipatory bail fearing arrest under non-bailable offences specified in Sections 132(1)(b) and (c) read with Section 132(5) of the CGST Act.

The applicants, husband and wife, claimed that the wife was a dormant partner not involved in the business. The Commissioner’s submission highlighted serious irregularities: M/s. Sheela Sales Corporation had availed Input Tax Credit (ITC) amounting to Rs. 53.50 crores from July 2017 to September 2019 against invoices totaling Rs. 352.92 crores. These returns were filed belatedly, with significant delays noted in filing periods ranging from July 2017 to November 2019.

Further investigation revealed that the claimed ITC was based on invoices from M/s. Jai Bajrang Traders, a purported firm in Uttar Pradesh which was found to be non-existent. The applicants’ firm failed to provide evidence such as e-way bills or payment proof within the stipulated 180 days. As per the Commissioner, non-payment within this period would require an amount equivalent to the availed ITC to be added to the tax liability, as per CGST Act provisions.

Moreover, the investigation discovered that M/s. Sheela Sales Corporation not only availed fraudulent ITC but also passed on a portion of it to closely related firms and subsequently to 360 other firms across the country. The applicants were issued summonses, but responses were inadequate, with the husband responding to only two out of seven summonses, while the wife did not respond to any. Additionally, another individual related to a closely held entity also did not respond to a summons.

In conclusion, based on these findings and submissions, the Court deliberated on the applicants’ request for anticipatory bail under Section 438 of the Criminal Procedure Code, considering the seriousness of the alleged offences and the evidence presented by the Commissioner.

alleged that M/s. Sheela Sales Corporation, represented by its partners (applicant no.1 and applicant no.2), engaged in fraudulent activities under the Central Goods and Services Tax Act, 2017. The case, heard by the Court, revolves around allegations of serious financial misconduct including non-bailable offenses.

The applicants sought anticipatory bail fearing arrest in connection with accusations under Sections 132(1)(b) and (c) read with Section 132(5) of the CGST Act. M/s. Sheela Sales Corporation, a registered entity involved in trading, allegedly availed Input Tax Credit (ITC) amounting to Rs.53.50 crores between July 2017 and September 2019, against invoices totaling Rs.352.92 crores. The filing of GSTR-3B returns by the firm was reportedly delayed, spanning several months from 2018 to 2019.

The investigation conducted by the respondent, an officer under the CGST Act, revealed significant irregularities. It was found that the ITC claimed by M/s. Sheela Sales Corporation was based on invoices from M/s. Jai Bajrang Traders, a purported firm in Uttar Pradesh that was determined to be non-existent upon investigation. Moreover, the applicants allegedly failed to provide essential documentation such as e-way bills or proof of receipt and storage of goods. The respondent also highlighted discrepancies in the payment timeline stipulated under the CGST Act, indicating non-compliance by the applicants.

Further investigation uncovered that M/s. Sheela Sales Corporation not only availed fraudulent ITC without actual receipt of goods but also passed on this credit to closely affiliated entities and subsequently to numerous other firms across the country. This chain of transactions suggested a pattern of circular trading aimed at illicitly benefiting from tax credits.

During the investigation process, summonses were issued to the applicants and other relevant parties, but responses were reportedly incomplete or absent. Statements from applicant no.1 acknowledged discrepancies in the transactions involving M/s. Jai Bajrang Traders, confirming that neither goods were received nor payments made as claimed.

In conclusion, the respondents accused the applicants of orchestrating a scheme of circular trading and illicitly claiming and passing on substantial ITC amounts, thereby violating provisions of the CGST Act. The Court, having heard arguments from both sides and reviewed the case file, would decide on the merits of granting anticipatory bail to the applicants amidst these serious allegations.

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