Punjab & Haryana High Court Rejects Bail Of Accused Allegedly Availing Fake Income Tax Credit

Punjab & Haryana High Court Rejects Bail Of Accused Allegedly Availing Fake Income Tax Credit

The Punjab and Haryana High Court (HC) in the case titled Mohit Bathla (Petitioner) v. Central Goods and Service Tax Division Panipat (Respondent) refused to grant bail to a person alleged of availing fake Input Tax Credit (ITC).

The single-judge of the HC Justice Arvind Singh Sangwan stated that the main allegations against the petitioner were regarding availing of fake ITC limit of 4 firms and on clubbing of the same, the amount as calculated by the respondent is approximately Rs. 18 crores.

The Court further noted that taking into consideration the fact that the custody of the petitioner is below 3 months and hence it is not appropriate to grant the concession of regular bail to the petitioner, at this stage.

The petitioner prayed for a grant of regular bail before the HC for offense under Section 132(1)(b) and 132(1)(c) punishable under Clause L(i) of Section 132(1) of the Central Goods and Services Tax, 2017 (CGST Act).

It was contended by the petitioner that the accounts of the firms of the petitioner were verified by GST Officers from time to time and as per the statement dated 12 February 2020, on verification of the copies of various Goods & Services Tax Returns (GSTR), Reconciliation of Input Tax Credit Claim, nothing was found suspicious.

The petitioner has prayed for bail on the ground that in order to bring the offense under Clause (i) of Section 132 of the CGST, 2017, different amount of ITC were clubbed to attract maximum punishment and therefore, no proper procedure has been followed.

It was further argued by the petitioner that there is no fake or bogus invoices or no false claim have been set up by the petitioner as he has filed all the documents relating to the transactions from time to time with the respondent – authorities as per the procedure laid down in the Rules of the CGST, 2017.

The contentions of the petitioner were that the case against him was not proved as no complaint was filed against him and he has been detained while exercising the powers under Section 132 of the CGST, 2017.

The respondent has opposed the prayer for bail of the petitioner on the ground that a complaint has already been filed against the petitioner after recording the statement of one witness namely Chander Parkash.

It was further contended by the respondent that he has relied upon various documents that were submitted by the petitioner claiming exemption from the CGST, it was found that the firm of the petitioner has received invoices without actual supply of goods from fake/bogus firms.

Based on the aforesaid contentions made by the parties and observations of the HC, it rejected the petition and dismissed the prayer of granting regular bail to the petitioner.