HC denied bail to petitioner for receiving bogus refund of tax which was actually never received by revenue

Case details: Rakesh Arora v. State of Punjab - [2021] 129 taxmann.com 286 (Punjab & Haryana)

Judiciary and Counsel Details

• • Avneesh Jhingan, J. 
  • Ashok Aggarwal, Sr. Adv. and Priyadarshi Manish, Adv. for the Petitioner. 
  • Gaurav Garg Dhuriwala, Sr. Dy. Adv. General and Sourabh Goel, Sr. Panel Counsel for the Respondent.

Facts of the Case

The Goods and Services Tax Department had information that the three firms were engaged in availing and passing bogus Input Tax Credit (ITC). The petitioner was common director in those firms and he was arrested. He submitted that he was in custody since 5th December, 2020 and till date no complaint is filed. He filed application for bail. The department submitted that these firms were procuring bills from Delhi based firms who had no purchases and further billing was done to export units for utilizing the ITC.

High Court Held

The Honorable High Court observed that these firms were procuring bills from firms based at Delhi who had no purchases and tax on which was not deposited to revenue. These firms were not only availing fake ITCs but also getting refunds of ITCs by showing sales to export units. It was also emerged from material collected during investigation that petitioner was one who gave directions to others and such a person if granted bail could flee or abscond. Therefore, it was held that the prayer of petitioner for grant of bail was liable to be rejected.

List of Cases Referred to

• • Anil Jain v. Directorate of Revenue Intelligence 2007 (207) ELT 215 (Delhi) (para 7)
  • Akhil Krishan Maggu v. Dy. Director, Directorate General of GST Intelligence [2019] 111 taxmann.com 367/[2020] 77 GST 279 (Punj. & Har.) (para 8)
  • Vimal Yashwantgiri Goswami v. State of Gujarat [2020] 121 taxmann.com 3 (Guj.) (para 9)
  • Manoj Cables Ltd. v. Union of India [CWP-8131-2020, dated 16-6-2020) (para 10)
  • Tarun Bassi v. State of Punjab [CWP-8004-2020, dated 12-6-2020] (para 10)
  • Rajinder Bassi v. State of Punjab [2021] 124 taxmann.com 284 (Punj. & Har.) (para 11)
  • Ganga Ram v. State of Punjab [CRM-M-27425-2020, dated 28-20-2020] (para 11)
  • R.V. Ramana Reddy v. Union of India [2019] 104 taxmann.com 407/73 GST 727 (Telangana) (para 14)
  • State of Gujarat v. Mohanlal Jitamalji Porwal 1987 taxmann.com 612 (SC) (para 34)
  • Y.S. Jagan Mohan Reddy v. CBI [2013] 7 SCC 439 (para 35).