TMI Blog2021 (6) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... process, Vennapusa Venkata Subba Reddy has issued fake GST invoices with a total turnover of ₹ 397,28,11,944/- without supply of goods to different business firms/companies by passing on a total fraudulent input tax credit of ₹ 61,30,33,274/- in respect of 21 firms, out of more than 70 firms created by him and thus caused huge loss to the Government exchequer. The investigation is stated to be pending. Without expressing any opinion on merits of petitioners case, it is considered apt to direct the petitioners to approach Special Judge for Economic Offences-cum-IV Additional Metropolitan Sessions Judge, Visakhapatnam for appropriate relief - petition disposed off. - Writ Petition Nos.9213 of 2019 and 21402 of 2020 - - - Dated:- 16-6-2021 - Hon'ble Sri Justice U. Durga Prasad Rao And Hon ble Ms Justice J. Uma Devi For the Petitioner : V V Lakshmi Narayana For the Respondent : Harinath N Asst Solicitor General COMMON ORDER: (PER UDPR,J) Both these writ petitions are filed by the same writ petitioners. Writ petition No.9213 of 2019 is filed challenging the proceedings in F.No.DGGI/VZU/INV/GST/13/2019, dated 08.03.2019 issued by the 3r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were conducted in the places like Guntur, Vijayawada, Narsaraopeta, Hyderabad etc., and they revealed that no business firms have operated from those premises and the CGST registrations were taken fraudulently in the names of different firms using wrong credentials/addresses with a view to passing of ITC by issuing fake tax invoices without actual supply of goods. Investigation further revealed that around 90 different firms are operated by V.V Subba Reddy for the purpose of claiming ITC by issue of fake tax invoices during the period and these firms operated in a network so as to conceal evasion. Some of the fictitious/shell firms, where searches were conducted, have admittedly purchased the fake tax invoices without actual receipt of goods from the firms operated by V.V Subba Reddy. Investigation is still under progress. (b) The respondent officials have arrested Vennapusa Venkata Subba Reddy on 11.03.2019 for violation of Section 132(1)(b) and Section 132(1)(c) of CGST Act, 2017 and fraudulently passing on ITC by issuing fake tax invoices without actual supply of goods in the name of different fictitious firms. Learned Judge of Economic Offences Court, Visakhapatnam remanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation and cash might be secreted in those lockers. (d) Subsequent to the release of Vennapusa Venkata Subba Reddy on bail on 18.06.2019, the 3rd respondent addressed a letter dated 02.07.2019 to the Branch Manager, Lakshmi Vilas Bank, Guntur and sent a copy to the 1st petitioner inter alia intimating that the authorization was given to Sri Bhaskar Prasad/the 4th respondent in W.P.No.9213 of 2019 to open and search the bank locker No.8 standing in the name of the 1st petitioner. However, on the request of the 1st petitioner to postpone the date of opening of the locker, the same was postponed to 24.07.2019. In the meanwhile the petitioners filed the present writ petitions. (e) The contention of the respondents is that the bank accounts were attached and lockers were sought to be opened as a part of the investigation and by following the CGST Act and Rules and therefore, the petitioners cannot claim any violation of their rights. 3. Heard Sri V.V. Lakshmi Narayana, learned counsel for petitioners Sri M.V.J.K. Kumar Senior Standing Counsel for Central Excise, Customs and Service Tax representing respondent Nos.1 to 4 and 6. 4. The main contention of the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red. Scrutiny of the documents revealed that Vennapusa Venkata Subba Reddy created 70 different fictitious/shell firms in Andhra Pradesh and Telangana for taking GST registrations. The modus operandi of the said Vennapusa Venkata Subba Reddy was that he opened the fictitious firms only on paper to issue fake GST invoices showing supply of iron and steel goods, chemicals, battery scrap, led etc. This fictitious firms generally operated in three levels. The firms operating at first level in the chain, will issue fake invoices without actual supply of goods in the name of firms operating at second level without any corresponding purchases and thus first level firms will neither pay GST nor file monthly GSTR -3B returns. The second level companies issue GST invoices in the name of firms operating at third level basing on the fake GST invoices issued by the 1st level firms and these second level firms show payment of GST utilizing irregular input tax credit taken basing on the invoice issued by the first level firms and accordingly, file monthly GSTR-3B returns. In turn, the firms operating at third level issue fake GST invoices without actual supply of goods to different business firms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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