Petitioner | Subhash Chouhan |
Respondent | UOI |
Decision By | Chhattisgarh High Court |
Date Of Order Or Judgement | 21-June-2022 |
Citation No. | 2022 (6) GSTPanacea 42 HC Chhattisgarh MCRC No. 900 of 2022 |
Hon’ble Judge | Justice Shri Deepak Kumar Tiwari |
Decision | In Favour of Assessee |
Wrongfully Utilizing ITC-The assessee has wrongly utilizes ITC & has supplied taxable goods without issuing tax invoice-Bail granted by HC
Wrongfully Utilizing ITC-Facts of the Case
The applicant has preferred this application for grant of bail.
The applicant is the Proprietor of M/s Minal Traders, Bhilai and is doing the business of Iron Trading.
He is arrested in Police Station Central GST, Raipur, for offence under Sections 132 (1)(a) & 132 (1)(c), 132 (1)(1)(i) of the CGST Act, 2017.
Alleging that the applicant carried out purchases from different entities and wrongly availed Input Tax credit of Rs.6,95,32,472/- by procuring invoices from fake and fictitious firm.
Also supplied goods without payment of tax and without issuing invoices.
Argument Before Court
Wrongfully Utilizing ITC-Petitioner’s Contention
The Learned Senior Counsel for applicant would submit that due procedure has not been followed.
All the necessary documents regarding business and trade of the applicant’s firm were provided, but were not considered in proper manner.
The offence under Section 138 of the Act is compoundable in nature and tax evasion is defined as bailable in character.
Co-accused have been granted bail by the co-ordinate Bench.
The allegations relating to supply of goods without issuing invoices are false, as the tax has already been paid.
further submits that no notice has been issued in compliance of Section 74 of the Act.
Also in the GST portal, there is no system of cross-checking for the traders who are wrongfully availing Input Tax Credit.
As the earlier supplier has not paid the GST in proper manner, therefore, there is failure of mechanism in the GST Department and permitted wrong GST in number to the traders.
further submits that there is no need of custodial interrogation, therefore, the applicant may be released on bail.
Wrongfully Utilizing ITC-Respondent’s Argument
Respondent opposes the bail application and submits that the applicant has been found to be habitually involved in procuring fake invoices.
He further submits that the statement of the applicant was recorded wherein he could not give satisfactory reply and sought to seek instructions from their Chartered Accountant.
The Chartered Accountant has also not submitted any explanation to the Department about non-existent firm to whom the supply has been made by the present applicant by using fake transport bilties.
The documents collected prima facie establish that the applicant has violated the provisions of Section 16, 31 & 49 of the Act and thereby committed the offence under Section 132 (1)(1)(i) of the Act.
Learned counsel also relies on the ratio laid down by the Hon’ble Supreme Court in the matter of P.V. Ramana Reddy Vs. Union of India {2019 SCC Online TS 2516} , In the said matter, protection was denied to the petitioner.
Chhattisgarh High Court Held
Wrongfully Utilizing ITC-The Chhattisgarh High Court Considering the submissions of the parties, held that offence under the Act are bailable and non-cognizable except for the offence under Section 132 (5) of the Act.
further considering that the applicant can be punished with maximum sentence of 5 years with fine, he is in jail for 9 months.
This Court after considering all the aspects of the matter, particularly the period of detention and the amount involved finds appropriate that if the applicant deposits Rs.70 lakhs under protest or admission of the disputed amount which would be adjusted in accordance with law, the applicant can be enlarged on bail.
Some conditions are :-
execute a personal bond for a sum of Rs.50,000/- ,
shall also deposit a sum of Rs.70 lakhs, within a period of 45 days,
also furnish all details of movable and immovable properties.
Consequently, the Bail Application is allowed.
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Subhash Chouhan
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Chhattisgarh High Court