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2020 (12) TMI 1308 - DSC - GSTSeeking grant of bail - creation of fake firms to claim Input Tax Credit - Section 132(1)(b) and (c) of Central Goods and Service Tax Act, 2017 - HELD THAT:- The Ld. Trial Court based its conclusion on the aspect of compounding the offence as per Sec. 138 of the GST Act. It is also noted accused shall deposit some amount before appropriate authority to show readiness and willingness to compound the offence. It is also taken into considerations accused has given undertaking and approach before the Trial Court seeking permission to compound the offence before commissioner on payment of Tax as per rules. It is further observed when accused is willing to pay the evaded amount and compound the offence no purpose will be served by keeping him behind the bar. It is worth to be noted the offence as alleged is an economic offence, whereby the applicant since July, 2017 till the date has been evading the Tax as alleged by receiving and issuing the bogus bills and invoices without actual sale or transportation of Goods. Total amount of evasion is ₹ 541 Crores. There is also an allegation as to creating fake firms to claim Input Tax Credit. There are 9 bogus firms as shown created and had issued fake invoices. In the present case in hand the main allegations of the department against the accused is that they are guilty of circular trading by claiming fake invoices on the materials never purchased and passing on input tax credit to companies to whom they never sold any goods. There are allegations as to fake companies were also formed to execute smooth illegal trading. The department has estimated that the fake GST invoices were issued to the total value of about ₹ 541 Crores - It is settled law supervening circumstances for the cancellation of bail, must be of such a nature as to lead to the conclusion that the accused does not deserve to be at liberty either by reason of a violation of the conditions of bail or due to supervening conduct which bears upon the misuse of the liberty by the accused. Application allowed in part.
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