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2019 (5) TMI 310 - HC - GSTProsecution u/s 132 - without determining tax , default, adjudication and penalty, straightway prosecution permissible - comparison with service tax law - HELD THAT:- This Court has carefully considered the submissions made on either side. This Court is in complete agreement with the stand taken by the department that. Section 132 of the Act. can be directly resorted, wherever offence is committed and it is not necessary to follow the procedure of assessment, demand and recovery or penalty proceedings. In the scheme of the Act, Section 132 stands independently and the moment a competent officer on inspection and search, finds any offence committed under Section 132 of the Act, prosecution can be directly launched. The Court was also dealing with the scheme of the service Act, wherein the Court found that both the penalty proceedings and prosecution proceedings will have to be preceded by adjudication for the purposes of determining the evasion of service tax. It was so held because the case involved non-payment of service tax collected which according to the Delhi High Court should have involved a process of determination of the tax payable and only thereafter the prosecution should have been launched. Both the above judgments are clearly distinguishable from the facts of the present case end under the scheme of the present Act. Grant of Anticipatory Bail - Outward supply of goods from 02.06.2018 to 09.01.2019, was shown without, movement, of goods on the basis of false and bogus E-way bills - inward supply from 02.06.2018 to 09.01.2019, was also fraudulently shown without actual movement of goods by bogus E-way bills - HELD THAT:- Section 132 of the Act will apply with all force the moment an invoice or a bill is issued without, movement of goods or Input Tax Credit has been wrongly availed. In the present case the preliminary investigation reveals that the entities have formed a cartel by doing circular trading between seven Companies whereby nearly 98 per cent of the transactions are among themselves and 2 per cent of the supply have been wade to other entities. In other words, the very same goods are being repeatedly shown as being supplied by way of purchase/sales amongst the entities only with a view to defraud the revenue and to distribute the credit illegally and fraudulently. There are also prima facie materials to show that the E-way bills generated by the entities are found to be totally false since on verification it was found the so-called movement of goods which is Iron and Steel has been done in vehicles which are two wheelers/three wheelers, vehicles which have already been seized by the finance companies and vehicles where the transporter himself says that no such movement of goods took place - The total turnover shown by the petitioners and the corresponding tax paid by them after adjusting the Input Tax Credit is almost minuscule. This Court in the light of the nature and gravity of the accusations put forth by the prosecution and also the fact that the investigation is at a very early stage, is not inclined to entertain these anticipatory bail petitions - Petition dismissed.
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