2018 (12) TMI 1350 – PATIALA HOUSE COURT – TMI – Cancellation of Bail – Wrong availment of Input Tax Credit – opening bogus companies in the name of dummy proprietors and through these companies had issued fake invoices with no actual supply of goods – cancellation of Bail – Held that:- The allegations are clear enough to make out a case falling under clause (b) of sub-section (1) of Sec. 132 of the CGST Act, 2017. The contention of Id. counsel for the accused/applicant that the application for judicial remand of the accused did not disclose the details of the offence except of making of a mention that Sec. 132(1)(b) is alleged, has no merits as admittedly when the application for judicial remand was preferred by the applicant before the Ld. Link MM, the entire record file including the arrest, search and seizures was put up for perusal and consideration.
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The allegations of tax evasion against the accused/ respondent was of less than ? 5 crores and as such taking out the Offence
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buse of the concession granted to the accused in any manner. The satisfaction of the Court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial.
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Not only there are serious allegations against the accused/ respondent of his having made fictitious sales of value of more than ? 200 crores and having consequently caused loss to the government of the GST evasion/wrongful availment of input tax credit of the value of more than ? 27 Crores, it is also alleged that the accused/respondent had indulged in the act of threatening the witnesses who were otherwise coming forward to give their statement to the department/pe
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uced before the Ld. Link Magistrate. On the remand application preferred against them, the Ld. Link MM admitted the accused/ respondent on bail and remanded the co-accused Adesh Jain to judicial custody till 02.08.2018. 3. It is averred that the accused/ respondent Rajesh Jindal and the co-accused Adesh Jain were arrested with the allegations that they were involved in generation of fake invoices by floating dummy companies/firms in the name of poor persons I third persons and of passing on the input tax credit (in short, ITC ) to unscrupulous persons / firms/ companies without actual supply of goods. This was done with the malafide intent to pass on the undue advantage of ITC to various companies / firms for utilizing the bogus GST ITC so generated. In return, accused / respondent and the co-accused were taking commissions at various rates. This activity of the accused/ respondent and of the co-accused was found involving fictitious sales of the value of ₹ 201 crores and of the
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against accused Rajesh Jindal was for a sum of ₹ 4,58,19,883/- which is less than ₹ 5 Crores and as such, the offence u/s 132(1)(b) being punishable under clause (ii) of sub-section (1) (b) of Sec. 132, falls under the category of non-cognizable and bailable and as such accused/ respondent was admitted tobail. As to co-accused Adesh Jain, since the duty evasion was found to be of more than ₹ 27 crores which was punishable u/s 132(1)(b) r/w clause (i), as such he was remanded to JC till 02.082018. 5. It is averred that the Ld.MM while opining the duty of tax evasion to be of less than ERs. 5 crores in respect of accused/ respondent Rajesh Jindal, referred to his statement voluntarily tendered on 01.08.2018 and recorded u/s 70 of the CGST Act, 2017. It is averred that the Ld. MM failed to take into consideration that there was a statement dated 31.07.2018 tendered by the respondent himself wherein he had admitted of his partnership with the Co-accused Adesh Jain. This
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vestigation. 6. It is averred that the modus operandi of the accused/respondent is that he floated various bogus firms by using the name of poor persons. less educated and unemployed individuals by luring them with consideration ranging from ₹ 12,000/- to ₹ 15,000/-. In return, these individuals used to hand over their Aadhar Card, PAN card, bank account details and registered mobile number to the accused/ respondent for using the same for OTP verification in the process of making them become the proprietors of the bogus firms. The accused/ respondent was actively assisted by the co-accused Adesh Jain and that these two used to take documents from the dummy proprietors for its use in government authorities for the purpose of taking Statutory registrations such as GST etc. The accused were aware that the government having eased the norms of operating business, is not requiring any human interface of the dummy proprietor with any of the GST official and the identity of the sa
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Court of Delhi vide its order dated 18.09.2018 giving liberty to the petitioner to approach the Court of Sessions u/s 439(2) Cr.PC. Hence, the present application before this Court has been filed. 8. It is further averred that not only the bail order and order dismissing the cancellation of bail application are illegal, even the accused/respondent after being granted bail had indulged himself in constantly threatening the witnesses and their statements in this regard were recorded, which again is a ground for cancellation of bail of the accused/ respondent. 9. Notice of the application was issued to the accused/respondent and reply to the application came to be filed. In the reply, it has been averred that the application / petition of the applicant I petitioner is based on falsehood and deserves to be rejected with exemplary costs. It is averred that the allegations are false and baseless and there is a deliberate suppression of material facts by the applicant I petitioner. It is aver
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ad, false and vague averments have been made in the application which are not substantiated by any document or material. 10. It is further averred that the application proceeds on a wrong notion that every offence under the CGST Act, 2017 is cognizable and non-bailable. In fact, except of few offences u/s 132 of the Act, all other offences are non-cognizable and bailable. Also, the maximum punishment provided u/s 132 of the Act is of five years and that the accused/ respondent had appeared before the authority as and when he was called upon by issuance and service of summons. As such, the present application is against the spirit and mandate of the law laid down by Hon ble Supreme Court in Arnesh Kumar vs state of Bihar (2014) 8 SCC 273 = 2014 (7) TMI 1143 – SUPREME COURT. 11. It is further averred that petitioner had cleverly concealed in the application that after being granted bail, accused/ respondent was issued summons dated 20.08.2018 seeking appearance on 30.08.2018. However, th
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the facts ought to have been stated so as to make out therefrom that offence u/s 132(1)(b) of the Act is made out. Mere allegation of tax evasion in itself is not sufficient to assume or presume that offence u/s 132 (1)(b) is made out. It is further averred that the application for cancellation of bail which was preferred by the applicant before the Ld. CMM only makes a mention that the amount of duty evasion by accused/ respondent is around 85 crores and therefore the offence is cognizable and non-bailable. Again, there was no allegation of any offence covered in clause (a) to (d) of sub-section (1) of Sec. 132 which are only cognizable and non-bailable. In fact, the Ld. CMM in the order dated 14.08.2018 noted that even the figure 85 seems to be have been inserted subsequently with a pen. Also, the bail Order dated 01.08.2018 clearly mentions that the entire proceedings file prepared by GST (West) has been perused. It is averred that as to the allegation of the accused/respondent ext
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nsel for the applicant/petitioner while making a reiteration of the facts as asserted in the application, placed reliance upon the judgment of Hon ble Supreme Court of India in Prahlad Singh Bhatti vs. NCT of Delhi, AIR 2001 SC 1444 = 2001 (3) TMI 1053 – SUPREME COURT OF INDIA. 15. Ld. Counsel for the accused/ respondent in his submissions also made a reiteration of the averments of the reply and placed reliance upon the following citations:- (i) Arnesh Kumar vs state of Bihar & Anr. (2014) 8 SCC 273 = 2014 (7) TMI 1143 – SUPREME COURT (ii) Ebiz.com Pvt. Ltd. vs union of India 2016 (44) S.T.R 526 = 2016 (9) TMI 53 – DELHI HIGH COURT. (iii) Amrit Foods vs. commissioner. 2005 (190) ELT 433 (SC) = 2005 (10) TMI 96 – SUPREME COURT OF INDIA (iv) Strategic Credit Capital Pvt Ltd. Vs. Ratnakar Bank Ltd, 2018 (9) GSTL 209 (Del.) = 2017 (6) TMI 23 – DELHI HIGH COURT (v) Haiko Logistic India Pvt. Ltd. vs UOI NO. WP(C) No. 7063/16 dated 21.08.2017 (Hon ble High court of Delhi) = 2017 (11) TMI
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or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act. (g) obstructs or prevents any officer… (h) acquires possession of, or in any way concerns himself in transporting, removing….. (i) receives or is in any way concerned with the supply, or in any other manner deals with any supply of services…… (j) tampers with or destroys any material evidence or documents. (k) fails to supply any information which he is required……. (l) attempts to commit, or abets the commission of any of the offences mentioned in clause (a) to (k) of this section. shall be punishable:- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine. (ii) in cases where the amount of tax evaded or
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r clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable. Now, coming on to the facts of the present case, as already, noted, the allegations against the accused/respondent are that he alongwith co-accused Adesh Jain had indulged in the act of opening bogus companies in the name of dummy proprietors and through these companies had issued fake invoices with no actual supply of goods and in this manner had wrongly taken the input tax credit. The allegations are clear enough to make out a case falling under clause (b) of sub-section (1) of Sec. 132 of the CGST Act, 2017. The contention of Id. counsel for the accused/applicant that the application for judicial remand of the accused did not disclose the details of the offence except of making of a mention that Sec. 132(1)(b) is alleged, has no merits as admittedly when the application for judicial remand was preferred by the applicant before the Ld. Link MM, the entire record f
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uch taking out the Offence from the purview of sub-section (5) of Sec. 132 of the Act, thus, making it non-cognizable and bailable. Admittedly, the file which has been produced by the applicant/ petitioner clearly notes in the note-sheet of the inquiry that the accused / respondent as well as the co-accused Adesh Jain in their respective statements recorded u/s 70 of CGST Act on 31.07.2018 have stated that they both were indulging in the act of providing false invoices to other companies I firms/ agents and thus were passing on wrongful availment of input tax credit. They also stated. that they were deducting the commissions for the said act. The total tax evasion as alleged at that time was against both the accused and it was of the value of more than ₹ 27 crores and not of less than ₹ 5 crores against the accused / respondent. Thus, the case against the accused/ respondent as also against the co-accused Adesh Jain was of the offence punishable under clause (i) rlw sec. 13
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preferred before the Ld. CMM did not take any other ground. In respect of Cancellation of bail, the law is well settled that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail, already granted. Generally speaking, the grounds for cancellation of bail, broadly (illustrative and not exhaustive) are:- interference or attempt to interfere with the due course of administration of justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. The satisfaction of the Court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concessi
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the present case. This contention of Id counsel has no basis as this is not the Stage to conduct an inquiry as to the veracity of these statements. The assertion of the department that the accused/respondent is threatening the witnesses and as such is affecting the investigation is based on the statements of the witnesses recorded to the said effect and having been shown during the course of advancing arguments and also of having been filed with the present application. I may also here gainfully refer to the judgment of Hon ble Supreme Court of India in Kanwar Singh Meena vs State of Rajasthan & Anr, Crl. Appeal No. 1662/2012 decided on 16.10.2012 = 2012 (10) TMI 1114 – SUPREME COURT wherein it Was observed that Section 439 of the Code confers very wide powers on the High Court and the Court of Sessions regarding bail. But, while granting bail, the High Court and the Sessions Court are guided by the same considerations as other courts. That is to say, the gravity of the crime, the
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amper with the evidence or interfere or attempt to interfere with the due course of justice or Vade the due Course of justice. But, that is not all. The High Court or the Sessions Court can cancel bail evidence in cases where the order granting bail suffers from serious infirmities resulting in miscarriage of justice. If the court granting bail ignores relevant materials indicating prima facie involvement of the accused or takes into account irrelevant material, which has no relevance to the question of grant of bail to the accused, the High Court or the Sessions Court would be justified in cancelling the bail. Such orders are against the well recognized principles underlying the power to grant bail. Such orders are legally infirm and vulnerable leading to miscarriage of justice and absence of supervening circumstances such as the propensity of the accused to tamper with the evidence, to flee from justice, etc would not deter the court from cancelling the bail. The High Court or the Se
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