Jatinder Manro VS Directorate General Of Goods & Services Tax Intelligence

The petitioner, having been arrested pursuant to this application, now seeks relief through bail, arguing that they should not be held in custody while the legal proceedings are ongoing. Section 439 of the Cr.P.C. confers special powers on the Sessions Court and the High Court to grant bail, particularly in cases where the individual is in custody pending investigation, trial, or any other legal proceeding.

The arrest and production application in question had been submitted before the Chief Judicial Magistrate (CJM) of Ludhiana, where the respondent, likely representing the Central Goods and Services Tax authorities, invoked Section 68 of the CGST Act. This section permits authorities to inspect, search, and seize goods, as well as apprehend individuals in cases of suspected tax evasion or non-compliance with GST laws.

The petitioner has approached the court seeking regular bail, which, if granted, would allow them to remain out of custody during the pendency of the case, subject to conditions imposed by the court. The court will consider several factors, including the nature of the allegations, the petitioner’s criminal record, the likelihood of tampering with evidence or influencing witnesses, and the risk of absconding, among other legal considerations, before deciding on the petition for bail.

The legal framework surrounding the CGST Act is aimed at ensuring proper compliance with taxation laws, and authorities are empowered to take strict actions in cases of violations, including arrest and detention. However, the petitioner’s argument for bail would likely rest on the contention that continued detention is unwarranted, particularly in the absence of any immediate risk of further violation or evasion of the law.

The court will have to balance the rights of the individual to personal liberty with the interests of the state in enforcing tax compliance, as well as the specifics of the case before arriving at a decision on the bail application.

In the present case, the petitioner, Jatinder Manro, faces serious allegations involving a fraudulent scheme that revolves around the generation of fake sale invoices amounting to a substantial sum of Rs. 128 Crores. The central accusation against Manro is that he played an active role in this fraudulent activity, which resulted in the issuance of these fake invoices without the actual supply of any goods or materials. Essentially, these documents were created to falsely represent transactions that never took place in reality.

A key aspect of the fraud pertains to the manipulation of the input tax credit (ITC) system. ITC is a mechanism under the Goods and Services Tax (GST) framework that allows businesses to reduce the amount of tax they owe to the government by claiming credits for taxes already paid on inputs. In this case, however, it is alleged that Jatinder Manro fraudulently availed and utilized ITC worth more than Rs. 19.50 Crores, despite no actual goods having been supplied. The input tax credit was claimed on the basis of the fake invoices, creating a significant financial discrepancy and a clear violation of the tax regulations.

The alleged fraud is linked to a company, M/s Pingashk Enterprises, located at the address 583/A, which appears to be involved in these suspicious transactions. This specific company and its address have been highlighted as part of the fraudulent activity, raising questions about the legitimacy of its operations and its role in the broader conspiracy to defraud the tax authorities.

Overall, the allegations against Jatinder Manro suggest a sophisticated scheme designed to deceive the tax system and claim undue financial benefits through false documentation and fraudulent practices. The case presents a serious instance of tax evasion and misuse of the ITC system, with significant financial implications for the state.

The allegations against the petitioner, Jatinder Manro, center around his involvement in a large-scale fraud involving fake sale invoices amounting to Rs. 128 Crores. It is claimed that these invoices were generated without any actual supply of goods, and through this scheme, Manro fraudulently availed and utilized Input Tax Credit (ITC) of over Rs. 19.50 Crores. The invoices were based on non-existent transactions, and no goods were ever exchanged in reality. The address linked to the fraudulent enterprise, M/s Pingashk Enterprises, is a residential flat located at 583/A, Lal Flats, Bawana Industrial Area, Delhi. This property is a small 20 x 20 flat, which, upon investigation, was found to have never been rented out. Interestingly, it was also identified as the business address of another entity, Radha Group of Industries, Delhi, with its proprietor, Sammy Dhiman, being a co-accused in the case.

The investigation further revealed that the total transactions in Pingashk Enterprises’ bank accounts in Axis Bank, Mandi Gobindgarh, amounted to Rs. 13,610 (credit) and Rs. 13,994 (debit), figures that pale in comparison to the vast sums involved in the fraudulent invoices. This discrepancy raised significant red flags regarding the legitimacy of the operations. Manro was summoned under Section 70 of the relevant Act on July 3, 2018, and his statement was recorded on both July 3rd and 4th, 2018. During these proceedings, he confessed to having fraudulently availed and utilized ITC worth Rs. 19.50 Crores on the basis of fake invoices approximating Rs. 128 Crores.

Additionally, Manro was present during a search operation conducted on July 3, 2018, where his statement was recorded on-site. His confession and the evidence gathered during the investigation indicate a deliberate attempt to manipulate financial records and deceive the authorities by falsely claiming tax credits through a complex web of fictitious transactions. The connection between Manro, Pingashk Enterprises, and the co-accused points to a coordinated effort to perpetrate tax fraud on a massive scale. The legal proceedings against him aim to address these serious charges of financial misconduct and tax evasion.

The allegations against Jatinder Manro, the present petitioner, center on his involvement in a large-scale fraud scheme involving the generation of fake sale invoices amounting to Rs. 128 Crores, without the actual supply of any material. This fraudulent activity allowed the petitioner to wrongfully avail and utilize input tax credit (ITC) exceeding Rs. 19.50 Crores. The transactions were conducted based on these fabricated invoices, with no legitimate exchange of goods valued at Rs. 128 Crores.

Further investigations revealed that the address associated with the fraudulent transactions, M/s Pingashk Enterprises, located at 583/A, Lal Flats Bawana Industrial Area, Delhi, was merely a small residential flat measuring 20 x 20. This address was never rented out for business purposes and was linked to another co-accused, Sammy Dhiman, the proprietor of Sh. Radha Group of Industries, Delhi. The inquiry also showed negligible activity in the bank accounts associated with Pingashk Enterprises at Axis Bank, Mandi Gobindgarh, with total transactions of only Rs. 13,610 (credit) and Rs. 13,994 (debit).

Manro was summoned under Section 70 of the Act on July 3, 2018, and gave his statement over two days, July 3 and July 4, 2018. During this period, he reportedly confessed to fraudulently availing and utilizing Rs. 19.50 Crores against the fake invoices of approximately Rs. 128 Crores. He was also present during a search operation on July 3, 2018, where his statement was recorded at the scene.

In the context of seeking bail, the learned senior counsel for the petitioner argued that Manro had been falsely implicated in the case. The counsel emphasized that Manro had been in custody since July 4, 2018, and that there was no need for any recovery from him. Moreover, the trial process was expected to take additional time, which led the defense to request his release from custody on bail.

In the case against the petitioner, Jatinder Manro, the allegations center around his involvement in a large-scale fraud. It is claimed that he participated in the generation of fake sale invoices amounting to Rs. 128 Crores without any actual supply of goods. As part of this scheme, the petitioner allegedly fraudulently availed and utilized Input Tax Credit (ITC) of over Rs. 19.50 Crores. The fraudulent transactions were based on these fake invoices, despite no physical goods being traded.

A significant element of the case is linked to the address of M/s Pingashk Enterprises, which was used in the fraudulent activities. The address, located at 583/A Lal Flats, Bawana Industrial Area, Delhi, is a small residential flat measuring 20×20, and upon investigation, it was revealed that it had never been rented out. Moreover, the same address was used as the business location for Radha Group of Industries, Delhi, whose proprietor, Sammy Dhiman, is named as a co-accused in the case. Investigations into the financial transactions of M/s Pingashk in Axis Bank, Mandi Gobindgarh, revealed insignificant amounts of money in the accounts, with Rs. 13,610/- credited and Rs. 13,994/- debited.

On July 3, 2018, the petitioner was summoned under Section 70 of the relevant act, and over the next two days, he provided a statement in which he admitted to having fraudulently availed ITC of Rs. 19.50 Crores against fake invoices for goods worth approximately Rs. 128 Crores. He was also present during a search operation conducted on July 3, 2018, and his statement was recorded at the scene.

During the bail hearing, the petitioner’s senior counsel argued that he had been falsely implicated in the case and emphasized that he had been in custody since July 4, 2018. Furthermore, the counsel noted that no recovery needed to be made from the petitioner and that the trial was still expected to take considerable time to conclude. On these grounds, the counsel requested that the petitioner be released from custody.

On the other hand, the prosecution, represented by another senior counsel, opposed the bail application, emphasizing the severity of the charges. The petitioner was accused of a serious fraud involving Rs. 19.50 Crores, an economic offense that carries significant weight. The counsel argued that such offenders, especially those involved in large-scale economic crimes, should be dealt with firmly and that the length of time the petitioner has spent in custody is not a sufficient reason to grant bail.

After carefully considering the arguments presented by both sides, as well as reviewing the case file, the court noted that the petitioner has been in custody since July 2018. However, the court recognized the gravity of the accusations leveled against him, including the fraudulent utilization of substantial sums of money based on false documentation.