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2022 (12) TMI 1130 - DSC - GSTSeeking grant of Regular Bail - fraudulent transactions - it is suspected that spurious goods have been exported and ITC claimed fraudulently - HELD THAT:- The case of the Department seems to be that there is a chain of documents without any actual supply of products while simultaneously there is no claim that the initial tax payment was not made and the entire claim of ITC in the chain is without any input tax deposit. Rather the Department is suggesting that, even though, there is payment of tax at one stage, all ITCs claimed in the chain are without any supply of goods. In the alternative and in my view, to explain the inherent contradiction in the said argument, the counsel for the Department has coined the parallel theory that if there was actual purchase of cigarettes by M/s Radiant Traders, the same were perhaps sold in the market without invoicing and spurious smoking mixture was used as a cover to explain its disappearance, as also, used for the purposes of claiming input tax credit for the export of the smoking mixture. This is proposed to be established by firstly, the lab test report dated 02.11.2022 and secondly, the statement of the applicant/accused. Surprisingly, even though, the report was given by the chemist on 02.11.2022, that is even before the arrest of the accused, the Department made no further attempt to seek an opinion from another lab on the subject. Rather, the Department chose to arrest the accused and even after the arrest and up till today the samples have not been sent to any other lab to seek answer to query no. 2 and 3 raised by the IO as far as back on 19.10.2022. The Department seems content with the assumed position that Tobacco was not used in the smoking mixture, which assumption is in the teeth of the inconclusive opinion given by the chemist on 02.11.2022 - Why the Department chose not to send the samples to another lab seeking answers to query no. 2 and 3 when the accused is languishing in Jail, that too, in the clear absence of any opinion on the presence of Nicotine and Tobacco in the product? The benefit of this serious lapse in the investigation has to be given to the accused at this stage. In view of the discussion pertaining to the assumption of the Department regarding non use of Tobacco as a input, even though the report of the chemical examiner being inconclusive on the presence of nicotine and tobacco for want of testing facility, the period already undergone by accused in JC and want of any evidence other than the statement of the accused and the aforesaid discussion, the accused is admitted to bail on furnishing bail bonds/surety bonds in the sum of Rs.10,00,000/with one surety of like amount to the satisfaction of the concerned Ld. MM/Duty MM and also subject to the conditions imposed. Bail application allowed.
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