2021 (8) TMI 1004 - HC - GST

Seeking pre-arrest bail - input tax credit - fraudulent invoices were raised by the complainant - offences punishable under Sections 420 406 and Section 34 of the Indian Penal Code - HELD THAT - In terms of the GST Input Tax Credit Rules that for availing the Input Tax Credit Invoices issued by the supplier of the goods is a mandatory document. Herein the response of the Assistant Commissioner CGST in clear terms says that M/s. Bansal Traders has availed the ITC against Invoices No.106 and 107. Besides the statements of the Manager of the Warehouse owner of the trucks and the statements of drivers prima-facie show that goods were delivered at the request of M/s. Bansal Traders to and at the godown premises of Sarfaraz. In consideration of the facts of the case and the evidence collected in the course of investigation there are reason to believe that goods were supplied by the complainant to the applicant. No case is made out for granting pre-arrest protection to the applicant - Application rejected.

Summary

Issues:
- Application for pre-arrest bail in connection with a criminal case involving Sections 420, 406, and 34 of the Indian Penal Code.
- Dispute over the transaction of large quantities of cloves between the applicant and the complainant.
- Allegations of fraudulent invoices and non-receipt of goods by the applicant.
- Examination of documentary evidence and statements from witnesses to determine the credibility of the transaction.
- Analysis of Input Tax Credit (ITC) availed by the applicant based on the invoices issued by the complainant.
- Decision on granting pre-arrest protection to the applicant.

Issue 1: Application for Pre-Arrest Bail
The applicant sought pre-arrest bail in a case involving Sections 420, 406, and 34 of the Indian Penal Code. The applicant, through his counsel, denied the transaction with the complainant and raised concerns about fraudulent invoices. The defense argued that custodial interrogation was unnecessary as the prosecution relied mainly on documentary evidence. The applicant's permanent residence in Mumbai was highlighted to secure his presence during investigation and trial.

Issue 2: Dispute Over Transaction
The case involved a transaction of large quantities of cloves between the applicant, trading as M/s. Bansal Traders, and the complainant, owner of M/s. Esjaypee Mercantile Global Private Limited. The complainant alleged non-payment for the delivered goods, leading to the registration of the criminal case. The defense contended that the applicant never received the goods and disputed the authenticity of the transaction.

Issue 3: Examination of Documentary Evidence
The prosecution presented statements from the Warehouse Keeper, drivers, and relevant documents indicating the transfer and delivery of cloves to the applicant's firm, M/s. Bansal Traders. The Assistant Commissioner confirmed that the applicant availed Input Tax Credit against specific invoices issued by the complainant. The evidence suggested that goods were indeed supplied by the complainant to the applicant, contradicting the applicant's claims of non-receipt.

Issue 4: Decision on Pre-Arrest Protection
After reviewing the evidence and statements collected during the investigation, the judge concluded that the applicant had received the goods as per the complainant's invoices. The judge found no grounds for granting pre-arrest protection to the applicant and rejected the bail application. It was clarified that the decision was specific to the bail application and would not influence the trial proceedings.

In summary, the judgment addressed the dispute over a transaction involving the supply of cloves, examined documentary evidence and witness statements, analyzed the Input Tax Credit availed by the applicant, and ultimately denied pre-arrest protection based on the findings of goods being supplied to the applicant as per the invoices.