The Commissioner of Central Tax, GST Delhi (West) Versus Rajesh Jindal
GST
2018 (12) TMI 1350 – PATIALA HOUSE COURT – TMI
PATIALA HOUSE COURT – DSC
Dated:- 22-12-2018
Application No. 3040/18 Case No. 1594/18
GST
SHRI SATISH KUMAR ARORA
1. By this order, I shall decide the application I petition preferred by the applicant / petitioner Commissioner of Central Tax, GST, Delhi (West) seeking cancellation of bail as granted to the accused/ respondent Rajesh Jindal by the Ld. CMM, PHC. New Delhi vide order dated 01.08.2018.
2. Case of the petitioner as per the petition is that accused/respondent alongwith co-accused Adesh Jain was arrested by the officials of the petitioner on 01.08.2018 and was produced before the Ld. CMM of the very same day. Since the Ld. CMM was not available, the respondent/accused and the co-accused were produced before the Ld. Link Magistrate. On the remand application preferred against them, the Ld. Link MM admitted the accused/ respondent on
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before the Ld. Link MM, it was noted by the Ld. MM vide his order dated 01.08.2018 that the offence stated to be made out against the accused persons falls under the provisions of Sec. 132 (1)(b) of the CGST Act, 2017 and that as per the mandate of the law as provided under clause (4), all the offences under this Act except the offences referred to in sub-sec (5) are non-cognizable and bailable. The offence u/s 132(1)(b) of the Act is the one which falls within the domain of sub-section (5) of Sec. 132 of the CGST Act if the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds Rs. 5 crore, thus, making the offence as cognizable and non-bailable. Ld. MM then noted that perusal of the proceedings of GST (West) at that stage revealed that the allegations of tax evasion against accused Rajesh Jindal was for a sum of Rs. 4,58,19,883/- which is less than Rs. 5 Crores and as such, the offence u/s 132(1)(b) being punis
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endered voluntarily u/s 70 of the CGST Act wherein he stated that they were sharing the profits equally. It is averred that the accused/respondent in his statement again recorded on 03.08.2018 u/s 70 of the CGST Act had further admitted that he and co-accused Adesh Jain were sharing profits and expenses and were selling the invoices to various persons. It is averred that as such, even on the date when the accused/ respondent was produced before the Ld. Link MM, the amount of tax evasion was of more than Rs. 27 crores and as such the offence was covered u/s 132(5) of the CGST Act, 2017 making it cognizable and non-bailable. In addition, it has been averred that during further investigation, the amount of GST so fraudulently passed has increased to the tune of Rs. 50 crores and is increasing with each passing Step of the investigation.
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 educate
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nd issuing fake invoices. The searches carried out at the premises of the accused/ respondent and of the co-accused resulted in seizure of many fake and bogus tax invoices and also of the computers wherein such information was used to be stored.
7. It is averred that as such the order dated 01.08.2018 vide which the Ld. Link MM had made a distinction of the case against the accused/ respondent is patently illegal. It is averred that as such, the applicant I petitioner preferred an application seeking cancellation of bail of the accused/ respondent before the Ld. CMM, PHC which came to be dismissed vide order dated 14.08.2018 which was passed on extraneous considerations. It is averred that thereafter the petitioner/ applicant preferred a petition Crl. M.C. No. 4767 of 2018 which was disposed of by the Hon'ble High 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 thi
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e accused/ respondent in itself was illegal as the offence alleged is non-cognizable and bailable. It is averred that even as per the allegations made in the application, the offence as disclosed is of the nature of offence u/s 132(1)(f) of the CGST Act, 2017 which is a non-cognizable and bailable offence irrespective of the amount of the tax allegedly evaded. It is averred that the law is well settled by the Hon'ble Supreme Court of India in DoIat Ram & ors vs state of Haryana, (1995) 1 SCC 349 = 1994 (11) TMI 424 – SUPREME COURT wherein it was held that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of bail, already granted. It is averred that in the application I petition, no cogent or overwhelming Circumstance has been shown meriting cancellation of bail. Instead, 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 procee
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the Authority/ department but, except of making him wait, the authority did not record any statement. Same was the situation in respect of summons dated 26.10.2018. Not only that, accused/ respondent was coerced by the applicant's officers to deposit Rs. 40 Lacs towards the tax allegedly avoided. The accused/ respondent was also not informed of the grounds of his arrest which is in violation of the provisions of sec. 41(B) of the cr.pc and of sec. 69(2) of CGST Act, 2017.
12. It is further averred that the remand application dated 01.08.2018 did not give the description and the nature of offence except of stating that the alleged offence is u/s 132(1)(b) of the CGST Act, 2017 which is non-bailable and cognizable and that the tax evasion is more than Rs. 5 crores. It is averred that in the remand application, 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 as
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ndent is threatening witnesses. Even otherwise, the alleged Statements of the witnesses placed with the record of present application are of 17.08.2018 and 21.08.2018, which in any case, is after the order dated 14.08.2018. It is averred that even the perusal of the alleged statements of the witnesses that they have been threatened would reveal that it has been typed in a standard format and that it is a pointer that these are false statements. Thus, prayer was made to not only dismiss the application of the applicant /petitioner but also to prosecute the applicant I petitioner u/s 340 Cr.PC.
13. Sh. Harpreet Singh, Ld. Senior Standing Counsel for the applicant / petitioner and Sh. J. K. Mittal, Id. Counsel for the accused/respondent were heard and the record was carefully perused.
14. In his submissions, Id counsel 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 i
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SCC 280 = 2001 (3) TMI 1053 – SUPREME COURT OF INDIA.
16. Before taking up the rival submissions, it is necessary to take note of the relevant provisions of the law.
Sec. 132 of the CGST Act, 2017 provides for the punishment for certain offences. It lays down:-
(1) Whoever commits any of the following offences, namely:-
(a) supplies any goods or services or both without issue of any invoice…
(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax
(c) avails input tax credit using such invoice or bill referred to in clause (b).
(d) collects any amount as tax….
(e) evades tax, fraudulently avails input tax credit or…….
(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due unde
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exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine.
(iii) In the case of any Other offence……
(iv) In cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.
(2) Where any person convicted of an offence under this section is again convicted….
(3) the imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall….
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under this Act, except the offences referred to in sub-section (5) shall be non-cognizable and bailable.
(5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable.
Now, comi
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rder dated 01.08.2018 had, therefore, formed the opinion that offence u/s 132(1)(b) Of the CGST Act is attracted to the facts presented before him. Also, the contention of Id. Counsel for the accused/ respondent that the allegations disclosed the offence u/s 132(1)(f) of the CGST Act, again has no merits as the said clause concerns the falsification of the financial records or the statements of account for evading tax. As noted, in the present case, the allegations are of wrongfully availing input tax credit on the basis of invoices without actual supply of goods and it squarely falls within clause (b) of sub-section (1) of sec. 132 of the CGST Act.
The other aspect is of the Ld. Link MM having formed the view that from the material available on record, the allegations of tax evasion against the accused/ respondent was of less than Rs. 5 crores and as such taking out the Offence from the purview of sub-section (5) of Sec. 132 of the Act, thus, making it non-cognizable and bailable. Ad
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o bail. Going further, even if it is to be believed that the amount of alleged tax evasion as on the date of production of the accused/respondent upon his arrest was less than Rs. 5 Crores, still the applicant by its application preferred before the Ld. CMM clearly averred that now the tax evasion is around 8.5 crores, thus, making the offence Cognizable and non-bailable. The Ld. CMM vide order dated 14.08.2018 formed the opinion that mere increase in the amount of tax evasion in itself is no ground to cancel the bail already granted when there was no allegation of either the accused / respondent attempting to tamper with the evidence or influence the witnesses or making an attempt to flee from justice. Admittedly, except of the plea of tax evasion being of about 8.5 crores, the applicant/ petitioner in its application for cancellation of bail 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 ov
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ion preferred before this Court, the ground additionally taken up by the applicant I petitioner is of the accused/respondent having extended threats to the witnesses who as per the applicant are those persons who were used as dummy proprietors of the bogus firms by the accused I respondent and the co-accused. This is a serious issue as it has the effect of tampering with the evidence and also of influencing the witnesses who may otherwise come up before the applicant/ department against the accused/ respondent. Id. Counsel for the accused/ respondent contended that the statements of the witnesses who have alleged that they are being threatened by the accused / respondent cannot be believed as these statements are doctored statements having been prepared only to Cause undue harassment to the accused/ respondent and to falsely implicate him in 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
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justice and repeating the offence, the possibility of his tampering with the witnesses and obstructing the course of justice and such other grounds are required to be taken into consideration. Each criminal case presents its own peculiar factual scenario and, therefore, certain grounds peculiar to a particular case may have to be taken into account by the court. The court has to only opine as to whether there is prima facie case against the accused. The court must not undertake meticulous examination of the evidence collected by the police and Comment on the same. Such assessment of evidence and premature comments are likely to deprive the accused of a fair trial”. It was further Observed that “While cancelling bail under Section 439(2) of the Code, the primary considerations which weigh with the court are whether the accused is likely to tamper 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.
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ely result in weakening the prosecution case and have adverse impact on the society”.
As already noted, not only there are serious allegations against the accused/ respondent of his having made fictitious sales of value of more than Rs. 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 Rs. 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/petitioner as to how the bogus firms were created and how their documents were misused. There are, thus, merits in the application of the applicant/ petitioner seeking cancellation of bail of the accused / respondent. The application is accordingly allowed and the order granting bail to the accused/ respondent is hereby set aside. Accused I respondent is taken into custody and is directed to be produced before the Ld.
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