BASUDEV MITTAL Vs. UNION OF INDIA

JUDGEMENT

(1.) The applicant has preferred this First bail application under Sec. 439 of the Code of Criminal Procedure for grant of regular bail as he is arrested in connection with Crime No. 178/GST/2021-22, registered in the office of Principal Commissioner, Central Excise and Central G.S.T., Raipur, District Raipur (C.G.) for the offence punishable under Sec. 132(1)(C) of Goods and Service Tax Act, 2017 (for short 'the G.S.T. Act').

(2.) The prosecution case, in brief, is that on the basis of Alert Letters, on 28/3/2022, in order to recover documents secreted at his premises to unearth the evasion of the GST amount, conducted search at the residential premises of the applicant, who is proprietor of M/s. Shree Sainath Enterprises, Raipur. During search and scrutiny of documents and data analysis, it was revealed that the applicant's firm purchased iron scrap from M/s. Kalodia Traders and M/s. S.R. Enterprises and eight others firms whose GST registration have already been cancelled and flatulently availed Input Tax Credit to the tune of more than Rs.5.00 Crore and thereby committed the offence. Based on this, offence has been registered and the applicant has been taken into custody on 30/3/2022.

(3.) Mr. Rajeev Shrivastava, learned Sr. Advocate appearing for the applicant submits that the applicant is innocent and has been arrested in a total false case of G.S.T. evasion. The applicant has not committed any offence as alleged by the prosecution. He further submits that on 31/2/2022, the applicant has paid Rs.76,00,000.00 under protest and subject to final assessment, as such, the amount being less than Rs.5,00,00,000.00, the alleged offence, in view of Sec. 132(4)(5) of the G.S.T Act, falls within the category of bailable offence. Learned counsel also submits that there is no credible and clinching evidence on record which would show that the present applicant, with an intention or knowledge, purchased goods from those firms whose registration have already been cancelled by the respondent. The G.S.T. portal itself shows that the alleged transactions have been taken place when the firms' registration was not cancelled or withdrawn and the applicant with bonafide intention trade in F.O.R. method, received tax input credit with the firms and transferred to the purchaser of applicant's as per rule. Furthermore, the so called forged firms have paid the G.S.T., therefore, applicant was able to receive input tax credit. Learned counsel also submits that the charge-sheet has been filed and there is no evidence on record to demonstrate that applicant has prepared forged and fictitious firms to avail benefit of input tax credit illegally. It is next submitted that the respondent conducted search at the residential premises of the applicant without any prior inquiry, assessment and demand notice and ignoring the documents produced by the applicant, the offence has been registered. It is further submitted that nothing suspicious has been seized from the possession of the applicant, which would show that the applicant created or managed forged and non-existed firms and fraudulently availed input tax credit. Further submission of learned senior counsel is that the alleged offence is compoundable and triable by Magistrate and maximum punishment is five years imprisonment. The applicant has neither committed nor participated in such act. The applicant is senior citizen aged about 60 years, permanent resident of Raipur and he is in jail since 30/3/2022, as such, there is no chance of his absconding and he is ready to furnish adequate surety and shall abide by all such conditions as may be imposed upon him by this Court, therefore, he may be granted privilege of regular bail. To buttress his submission, he placed reliance on the decisions of Hon'ble Apex Court in the matter of Union of India v. Make My Trip (India) (P) Ltd. reported in (2019) 11 SCC 765, Radheshyam Kejriwal v. State of W.B. reported in (2011) 3 SCC 581 and Dataram Singh v. State of Uttar Pradesh and Another reported in (2018) 3 SCC 22, order dtd. 21/6/2022 passed by co-ordinate Bench of this Court in MCRC No. 900/2022 (Subhash Chouhan v. Union of India Through Superintendent (Preventive), Central and Central Excise GST) and order dtd. 21/12/2021 passed in the matter of Rohan Tanna v. Union of India and Abhishek Pandey v. Government of India Through Senior Intelligent Officer, Director General of GST Intelligent, order of High Court of Madras in the matter of Jayachandran Alloy (P) v. Superintendent of GST and Central Excise and Others, judgment of High Court of Delhi at New Delhi in the matter of Make My Trip (India) Pvt. Ltd. v. Union of India, order of High Court of Bombay in the matter of Meghraj Moolchand Burad v. Directorate General of GST (Intelligence) and Another.