08.09.2023: Issuing Fake Invoices For GST Evasion Is Economic Offence Which Needs To Be Viewed Seriously, Poses Threat To Country’s Economy: Delhi High Court

The Delhi High Court has observed that issuing fake invoices and e-way bills for GST evasion is an economic offence involving loss to the public exchequer which needs to be viewed seriously.

Justice Amit Bansal denied anticipatory bail to a chartered accountant accused of forgery and GST evasion through the creation of false invoices issued by non-existent entities.

The case stems from a complaint filed by Umang Garg, who alleged that the chartered accountant induced him to purchase goods or materials through various firms, later discovered to be fictitious.

“In the present case is not just relating to the applicant having duped the complainant of a huge sum of money, it also involves allegations of issuing fake invoices and e-way bills for the purposes of GST evasion, which is an economic offence involving loss to the public exchequer. Such offences need to be viewed seriously as the same pose a threat to the economy of the country,” the court said.

The complaint was filed by one Umang Garg alleging that he had appointed the CA to look into the books of accounts of his company M/s Ulagarasan Impex Pvt Ltd.

He alleged that the CA induced him to purchase goods or material through different firms, after which he started purchasing the same through Bills or E-way Bills.

Garg alleged further that the CA made him deposit payments of the goods in various accounts, existing in different names and was adjusting the payment on his own. However, he later got to know that the said firms were bogus and non-existent.

As per the FIR, the CA and associates allegedly duped Garg of Rs.2,81,99,475 by creating fake, forged and fabricated firms and received payments including GST in different accounts against the purchased goods, but did not deposit the GST.

Dismissing the anticipatory bail plea, the court noted that the only justification given by the CA was that he was willing to deposit Rs.75 lakhs and and settle the matter in the mediation proceedings in respect of the remaining amount.

“It appears that the intent of the applicant was to secure interim protection upon payment of Rs.75 lakhs to the complainant and continue enjoying the said interim protection during the pendency of the mediation proceedings. It is to be noted that the interim protection was not granted to the applicant on merits but on account of possibility of settlement. Once the mediation proceedings have ended as ‘not-settled’, the application of the applicant has to be considered on merits,” the court said.

It further observed that during investigation, the evidence collected suggested that the CA was running the companies in question and that he had received a sum of Rs.3.5 crores from Garg.

“In the present case, for the aforesaid reasons, the custodial interrogation of the applicant is required. Considering the overall facts and circumstances of the case and the fact that the applicant needs to be confronted with various documents and statements of the witnesses, and the allegations levelled against him are serious, being in the nature of forgery and GST evasion by creating false invoices issued by non-existent entities, no grounds for grant of anticipatory bail to the applicant are made out,” the court said.

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