2019 Taxo.online 408
A.B.A. No. 6460 of 2018 dated 12.07.2019
MANOJ KUMAR PAREEK
THE STATE OF JHARKHAND
2019
GST
Central Goods & Services Tax Act, 2017
Sections 464, 468, 470 of the Indian Penal Code read with Section 132(1) (c), 132(1)(e) and 132(1)(i) of the Jharkhand Goods and Services Tax Act, 2017, n 73/74 of CGST/Jharkhand Goods and Services Tax Act
Kailash Prasad Deo, Justice
In favour of revenue
High Court
Jharkhand
Represented by: –
Petitioner: -Mr. Sumeet Gadodia, Advocate : Mr. R.K. Gupta, Advocate : Mr. Ranjeet Kushwaha, Advocate
Respondent: – Mr. Shekhar Sinha, A.P.P
Order: –
Petitioner is apprehending his arrest in connection with Jugsalai P.S. Case No. 85/18, corresponding to G.R. No. 2006/18 for the offence punishable under sections 464, 468, 470 of the Indian Penal Code read with Section 132(1) (c), 132(1)(e) and 132(1)(i) of the Jharkhand Goods and Services Tax Act, 2017.
F.I.R. has been lodged against the petitioner on 08.06.2018 with mainly four allegations:
(1) M/s Sakambari Metalicks, Proprietor Shri Manoj Kumar Pareek on the basis of forged rent agreement and other documents with regard to GST Act wrongly obtained the registration certificate.
(ii) There is no office at the mentioned place of trade and it is suspected that without any inward supply of goods, forged input credit of Rs. 5,73,42,065.90 (Rs. Five Crore Seventy Three Lakh Forty Two Thousand Sixty Five and Ninety Paise) has been credited in the input account and the same has been taken as a benefit and thus committed a cognizable offence under section 132(1)(c) of the Jharkhand Goods and Services Tax Act, 2017.
(iii) That without outward supply of actual goods, on the basis of forged invoice, the input credit between the period October, 2017 to February, 2018 State Goods and Services Tax/Central Goods and Services Tax, worth Rs. 2,39,56,138.42/- (Rs. Two Crore Thirty Nine Lakh Fifty Six Thousand One Hundred Thirty Eight and Forty Two Paise) and under Integrated Goods and Services Tax worth Rs. 3,43,99,080.27/- (Rs. Three Crore Forty Three Lakh 2 Ninety Nine Thousand Eighty and Twenty Seven Paise) and as such committed an offence punishable under section 132(1)(b) of the Jharkhand Goods and Services Tax, 2017.
(iv) That the petitioner has wrongly adjusted the input credit on the basis of the above fraud committed by him and as such punishable under section 132(1) (e) of the Jharkhand Goods and Services Tax, 2017.
Learned counsel for the petitioner has submitted that F.I.R. has been filed without initiating a proceeding under section 73/74 of CGST/Jharkhand Goods and Services Tax Act which is mandatory before institution of a criminal case and placed reliance on the judgment of M/s Jayachandran Alloys (P) Ltd. vs. Superintendent of GST and Central Excise and Ors. decided on 04.04.2019 by the Hon’ble Madras High Court.
Learned counsel for the petitioner has further submitted that the informant has filed this case under misconception. Learned counsel has drawn attention of this Court towards section 74 of the G.S.T. Act, 2017. Learned counsel for the petitioner has further submitted that this issue has already been decided by the Hon’ble Madras High Court in the case of M/s Jayachandran Alloys (P) Ltd. vs. Superintendent of GST and Central Excise and Ors. This issue has also been settled by the Hon’ble Delhi High Court in the case of MAKEMYTRIP (India) Pvt. Ltd vs. Union of India & Ors affirmed by the Hon’ble Apex Court.
From the above submissions, learned counsel for the petitioner has submitted that the case has been hurridly filed which was not maintainable at the stage. Learned counsel for the petitioner has further submitted that whatever transaction has been done, those document has been brought on record by way of Annexure-4 to 9 showing the corresponding entry made in the debit account and the credit account of the other companies. Learned counsel for the petitioner has further submitted that the Department has filed criminal case before the assessment made by the Director General of Goods and Services Tax Intelligence (DGSI). Learned counsel for the petitioner has thus submitted that no money has been taken by the petitioner rather it is an electronic form which remained in the credit, the same has to be adjusted and as such, the State has not suffered any loss on the account of interest and such transactions which are by way of Bank transactions, no loss can be caused to the State nor anything has been fraudulently taken by the petitioner. Learned counsel for the petitioner has thus submitted that the allegations 3 made under the Indian Penal Code is to be proved as no document has been found by the inspection team or by the DGCEI as a forged document used by the petitioner, as such, the petitioner may be enlarged on anticipatory bail. Learned counsel for the petitioner has submitted that on the date of inspection when the premises have been found to be vacant, the authority without verifying their own record with respect to closure of the business and surrender of the registration number by the petitioner has wrongly mentioned the same in the First Information Report, as per the document admitted between the parties, which has not been controverted by the State. Learned counsel for the petitioner has further submitted that the office of petitioner was already closed prior to the date of inspection, as such, any forgery committed by petitioner as alleged in the First Information Report is not sustainable in the fact of the case when the Department has itself accepted the surrender of petitioner’s company in Jharkhand and closure of registration number. Learned counsel for the petitioner has thus submitted that the petitioner who has no criminal antecedent may be enlarged on anticipatory bail by this Court.
Learned counsel for the State has vehemently opposed the case and has placed reliance upon the counter-affidavit filed by the informant dated 06.03.2019 relying upon para-7 to13 which reads as follows:
“That it is submitted that according to enquiry report in the month of October, 2017 to February, 2018 according to GSTR 3B Total invoice value is Rs. 38,25,50,875.29, Taxable Value is Rs. 32,41,95,656.60, IGST of Rs. 3,43,99,080.27, CGST of RS. 1,19,78,069.21, SGST of Rs. 1,19,78,069.21.
That it is submitted that according to enquiry report, in the month of October, 2017 to December, 2017 the petitioner purchase according to GSTR 2A is Rs. 29,62,21,589.32 and Total Sale according to GSTR 3B is Rs. 13,34,80,396.00, from the above figure it is clear that the stock remaining with the petitioner as on 31.12.2017 is Rs. 16,27,41,193.32. Now the question arises that the petitioner is claiming that he possess no godown then how it is possible tha as per record of GSTR 2A and GSTR 3B as on 31.12.2017 the remaining goods with the petitioner is to the tune of Rs. 16,27,41,193.32. The petitioner statement of GSTR-2A and GSTR-3B and claim of transit sale is of contradictory in nature.
That it is submitted that according to enquiry report, in the month of January, 2018 to February, 2018 has purchased according to GSTR-2A Rs. 7,96,87,508.76. From 01.01.2018 to 19.01.2018 the petitioner had not sold according to sale register. From 20.01.2018 to 28.02.2018 the petitioner had sold goods according to the sale register to the tune of Rs. 24,34,14,800.52 and then finally winding up his business in which circumstances has not been explained. The petitioner 4 never came to prove the mode of transportation and the mode of payment. From the above submission it is evident that the case needs thorough investigation by the investigating agency. The petitioner C.A. During inspection produced only five builty concerning transportation which is not sufficient to prove that he was not under circular trading.
That it is submitted that the tax which has not been deposited in the Government Exchequer cannot be claimed as input tax credit and onus to prove is on the petitioner. From the perusal of the bank statement furnished by the C.A. Of the petitioner it is observed that the petitioner has not made payment to the respective sellers from which the petitioner purchased the materials rather he had made payment to another firm namely M/s Jai Hanuman Metallicks which is sufficient to substantiate that the petitioner has done total fake transaction to take huge amount of input tax credit on the basis of forged document which needs detailed investigation and the matter is still under investigation.
That it is submitted that the petitioner has not explained the mode of payment of freight, therefore it needs detailed investigation by the investigating Agency in this matter.
That it is submitted that stock register and books of account must be maintained at the registered place of business for each and every transaction and the mode of payment of freight and mode of transportation has not been explained by the petitioner for each and every transaction.
That it is submitted that ACST-Singhbhum Circle Shri Kanchan Barwa had already issued DRC-07 on 02.02.2019.” That it is submitted that according to enquiry report, in the month of Oct-17 to Feb-18, the total difference of ITC between GSTR-2A & GSTR-3B is Rs. 2,66,08,505.24 (Rs. Two Crore Sixty Six Lakh Eight Thousand Five Hundred Five and Twenty Four Paise) in IGST. That it is submitted that according to enquiry report, in the month of Oct-17 to Dec-17 the petitioner puchase according to GSTR-2A is Rs. 29,62,21,589.32 (Twenty Nine Crore Sixty Two Lakh Twenty One Thousand Five Hundred Eighty Nine and Thirty Two Paise) and total sale according to GSTR-3B is Rs. 13,34,80,396.00 (Rs. Thirteen Crore Thirty Four Lakh Eighty Thousand Three Hundred Ninety Six), from the above figure it is clear that the stock remained with the petitioner as on 31-12- 2017 is of Rs. 16,27,41,193.32 (Rs. Sixteen Crore Twenty Seven Lakh Fourty One Thousand One Hundred Ninety Three and Thirty Two Paise). Now the question arises that the petitioner is claiming on the ground that even without having any godown, how it is possible that as per record of GSTR-2A and GSTR-3B as on 31-12-2017, the goods remains with the petitioner is to the tune of Rs. 16,27,41,193.32 (Rs. Sixteen Crore Twenty Seven Lakh Fourty One 5 Thousand One Hundred Ninety Three and Thirty Two Paise). The petitioner’s statement of GSTR-2A and GSTR-3B and claim of Transit sale are contradictory to each other. It is submitted that according to enquiry report in the month of January-2018 to February 2018, petitioner has purchased according to GSTR-2A Rs. 7,96,87,508.76/- (Rs. Seven Crore Ninety Six Lakh Eighty Seven Thousand Five Hundred Eight and Seventy Six Paise). From 01- 01-2018 to 19-01-2018, the petitioner had not sold goods but remaining stock is to the tune of Rs. 16,27,41,193.32/- (Rs. Sixteen Crore Twenty Seven Lakh Forty One Thousand One Hundred Ninety Three and Thirty Two Paise), which are in the contradiction of GSTR-3B and GSTR-2A statement and claim of transit sale. And according to sale register, from 20.01.2018 to 28.02.2018 the petitioner had sold goods to the tune of Rs. 24,34,14,800.52/- (Rs. Twenty Four Crore Thirty Four Lakh Fourteen Thousand Eight Hundred and Fifty Two Paise). Learned counsel for the State has placed reliance upon judgment of Vikas Goel and Another vs. Central Goods and Services Tax Commissionerate, Gurugram decided on 13.12.2018 whereby the regular bail of Vikas Goel has been dismissed by the Hon’ble High Court of Punjab and Haryana at Chandigarh. Learned counsel for the State has further submitted that prior to the institution of the present case, petitioner was directed under section 122 (i) (vii), section 73 and 74 of the JGST Act, 2017 to appear and put his submission before DCST (Deputy Commissioner, Sales Tax), Singhbhum Circle on 28.05.2018 at 11.00 A.M. The then Assistant Commissioner, Sales Tax, Singhbhum Circle submitted his inquiry report after investigation on 02.06.2018 and after that an F.I.R. was lodged on Sakambari Metalicks in Jugsalai Police Station by the present informant.
Learned counsel for the petitioner has vehemently opposed and has submitted that pursuant to the notice dated 28.05.2018, the Deputy Commissioner, Sales Tax, Singhbhum or Assistant Commissioner, Sales Tax, Singhbhum has not passed any order under Section 74 of JGST 2017 rather whatever he has submitted that is their internal document, which has nothing to do with adjudication under section JGST, 2017 is concerned.
Learned counsel for the State has thus submitted that the petitioner was subsequently found guilty by the DGCEI of Rs. 24,34,14,800.52/- (Rs. Twenty Four Crore Thirty Four Lakh Fourteen Thousand Eight Hundred and Fifty Two Paise) and as such, petitioner is not entitled for privilege of anticipatory bail.
Heard, learned counsel for the petitioner and learned counsel for the State and perused the materials brought on record. It appears that petitioner has been made accused in a case registered under sections 464, 468, 470 of the Indian Penal Code read with section 132(1)(c), 132(1)(e) and 132(1)(i) of the Jharkhand Goods and Services Tax Act, 2017. State authorities have issued a notice prior to the institution of the case on 28.05.2018 after the inspection. Subsequent thereto the First Information Report has been lodged. It appears that the contention raised by the counsel for the petitioner that the case has been registered before adjudication of the matter and passing an order under section 74 of the JGST Act of 2017 and in view of the judgment of M/s Jayachandran Alloys (P) Ltd. vs. Superintendent of GST and Central Excise and Ors. as well as MAKEMYTRIP (India) Pvt. Ltd vs. Union of India & Ors, the entire proceeding is non-sustainable in the eyes of law. The present application has been filed for grant of anticipatory bail under sections 438 and 440 of the Code of Criminal Procedure with allegations of sections 464, 468, 470 of the Indian Penal Code read with section 132(1)(c), 132(1)(e) and 132(1) (i) of the Jharkhand Goods and Services Tax Act, 2017. After inquiry, the Director General of DGCEI has found this petitioner liable for sale of goods between 20.01.2018 to 28.02.2018 and as such, the objection taken by the petitioner regarding adjudication of final order under section 74 of the Jharkhand Goods and Services Tax Act, 2017 is not sustainable in the eyes of law. Apart from this, it appears that prior to institution of the case, the petitioner was already issued notice under section 74 of the Act. Apart from that statement of GSTR-2A and GSTR-3B and claim of transit sale is contradictory in nature. In the month of January, 2018 to February, 2018, purchase according to GSTR-2A is Rs. 7,96,87,508.76/- (Rs. Seven Crore Ninety Six Lakh Eighty Seven Thousand Five Hundred Eight and Seventy Six Paise) whereas sale of goods according to sale register is of Rs. 24,34,14,800.52/- (Rs. Twenty Four Crore Thirty Four Lakh Fourteen Thousand Eight Hundred and Fifty Two Paise) which itself creates doubt.
From the counter-affidavit, it appears that petitioner has not made payment to the respective sellers from which the petitioner has purchased the materials rather he had made payment to another firm namely M/s Jai Hanuman Metallicks which is sufficient to substantiate that the petitioner has done total fake transactions to take huge amount of input tax credit on the basis of forged documents which needs detailed investigation.
In view of such serious nature of the case and from the counter-affidavit filed by the Investigating Agency/State Police stating therein that accused petitioner has created fabricated rental paper and other document to show forged address in Jharkhand but during investigation, no such place was found there, it is apparent that the petitioner has created fabricated documents. The investigating Officer has further submitted in his counter-affidavit that he visited the factory address but no factory was found there. The Investigating Officer has found that petitioner has created forged and fabricated papers without any inward supply of materials and by showing forged bill where no consignment number, vehicle number or transport bills, obtained the benefit of input tax credit of huge amount from the G.S.T. which is a very serious offence and also in view of the fact that huge financial amount is involved, this Court is not inclined to exercise power under section 438 Cr.P.C.
Accordingly, the prayer for anticipatory bail of the petitioner is hereby rejected.
Interim relief granted earlier stands vacated.
