In the matter of Ashok Kumar Vs Commissioner Of CGST & CE the applicant had filed an SLP in Supreme Court against the decision of the Delhi HC denying him the anticipatory bail for the offence of circular trading and availing fake ITC under GST through various firms. Supreme Court dismissed his SLP on 9th September 2020 and refused to grant anticipatory bail.
The applicant firm had after availing the ITC of Rs.53.50 crores without any actual receipt of goods passed on the said ITC of Rs.53.50 crores to six firms, out of which five firms, namely M/s. Chandan Enterprises, M/s. Sheela Sales Private Limited, M/s. Chandan Sagar Sales Pvt. Ltd. M/s. Chandan Sagar Constructions Pvt. Ltd and M/s. Structeco Infrastructure Pvt. Ltd are closely held entities of M/s. Sheela Sales Corporation. Because the proprietor or partner or Director are common and are related to each other.
Investigation also revealed that above referred five firms have availed and passed on the said credit of Rs.63.50 crores to 360 other firms located in various parts of the country - applicant no.1 in his statement dated 9th December, 2019 and 20th January, 2020 admitted that none of his firms had received goods from M/s. Jai Bajrang Traders on which invoices they have availed ITC of Rs.53.63 crores. None of his firms has made payment to M/s. Jai Bajrang Traders.
Apprehending arrest on accusation of having committed a non-bailable offence in terms of Section 132(1)(b) and (c) read with Section 132(5) of the CGST Act, 2017 ), applicants had sought directions under Section 438 of the Criminal Procedure Code, that in the event of their arrest they may be released on bail. Bombay High Court observed that on perusal of file notings and statements of applicant, it prima-facie suggested that applicants' complicity in availing fake input tax credit without movement of goods on forged invoices Rs.63.50 crores is in breach of provisions of Section 16 of CGST Act, which is cognizable offence under Section under Section 132(1)(b)(c) read with Section 132(5) of the CGST Act.
The applicants had failed to produce unique E-way bill number particulars, transporter's details, proof of receipt of goods either by himself or his agent or warehouse keeper and payment proof either by himself or by agent or otherwise.
The contention of respondents that fraudulent ITC claim of Rs.63.53 crores is a matter of grave concern and requires thorough investigation for which applicants' presence is absolutely necessary is well-founded. Many of the vehicle numbers are bogus and vehicle's registration date is later then the lorry receipt dates.
In view of the facts of the case and in the larger interest of the public and the State, in serious cases like this, HC Bench declined to exercise discretion under Section 439 of the Criminal Procedure Code in favour of applicant no.1. Applicant’s detention in custody was necessary to prevent him from causing the evidence of the offence to disappear or tampering such evidence.