Directed investigating officer to issue advance notice of 72 hours to effect the arrest after investigation

[CA Bimal Jain]

The Hon’ble Bombay High Court in NEHA AGRAWAL AND ANR. VERSUS THE SUPERINTENDENT, ANTI-EVASION, CGST MUMBAI CENTRAL AND ANR. - 2023 (1) TMI 233 - BOMBAY HIGH COURT has directed the investigating officer to issue advance notice of 72 hours to the assessee to effect the arrest if necessary, after investigation in a case. Further directed the assessee to co-operate in the matter and produce the materials as sought. 

Facts:

This bail application has been filed by Neha Agarwal (“the Applicant”) for alleged availment of  Input Tax Credit (“ITC”) by the Revenue Department (“the Respondent”), in breach of the provisions of Section 132(1)(b) and 132(1)(c) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), which is an offence in terms of Section 132(5) of the CGST Act, punishable with imprisonment of 5 years with fine.

The Applicant submitted that they have all the receipts to demonstrate that there has been no fraudulent availment of ITC, on the other hand, the Respondent submitted that the matter is still at the stage of investigation and that the Applicant is not co-operating.

Issue:

Whether the Applicant is entitled to seek Anticipatory Bail?

Held:

The Hon’ble Bombay High Court in NEHA AGRAWAL AND ANR. VERSUS THE SUPERINTENDENT, ANTI-EVASION, CGST MUMBAI CENTRAL AND ANR. - 2023 (1) TMI 233 - BOMBAY HIGH COURT held as under:

• Noted that, the Applicant is willing to render all possible co-operation and produce the materials in possession.
• Observed that, the matter is still under preliminary investigation and the Respondent has still not made any opinion about the arrest of the Applicant, therefore, the interest of justice would be sub-served if a direction is issued to the Applicant to cooperate.
• Directed the Respondent to effect the arrest, arrest after giving 72 hours notice in advance to the Applicant.

Relevant Provisions:

Section 132 of the CGST Act:

“Punishment for certain offences-

(1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely:-

(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;

(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;

(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(e) evades tax or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);

(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act;

(g) obstructs or prevents any officer in the discharge of his duties under this Act;

(h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;

(i) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;

(j) tampers with or destroys any material evidence or documents;

(k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or

(l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section,

shall be punishable––

(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine;

(ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine;

(iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine;

(iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.

(2) Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.

(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, be for a term not less than six months.

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) all offences under this Act, except the offences referred to in sub-section (5) shall be non-cognizable and bailable.

(5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable.

(6) A person shall not be prosecuted for any offence under this section except with the previous sanction of the Commissioner.

Explanation- For the purposes of this section, the term “tax” shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act.”

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