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TMI Blog2024 (3) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... ram Police Station, seeking an order granting Police custody of A.1 for ten days, with the following allegations, which are as under: (i) The Respondent/A.1 was an Additional Director of M/s. Avexa Corporation Pvt. Ltd., whose father is an Ex-Minister in the previous Government, indulged in unethical practices, conspired with the other Accused, who created Shell companies fraudulently, tampered with accounts, submitted forged documents to the Government and committed fraud and caused loss to a tune of Rs. 26,25,19,393/- to the State Exchequer and committed serious economical offence by diverting the funds under the guise of developmental works at Amaravati during 2017 to 2022 even though no works were carried out by colluding with other companies and gained illegally Rs. 8,00,00,000/-. Based on the report given by the Defacto Complainant, i.e. Deputy Director of Revenue Intelligence, A.P., Vijayawada, a case has been registered for the offences under Sections 420, 409, 467, 471, 477(A), 120(B) r/w. 34 IPC. Later, A.1 was produced by the S.H.O., Machavaram Police Station, before the learned Magistrate on 29.02.2024; after that, he was remanded to judicial custody. (ii) While A.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antial fraud amounting to crores committed by the Accused, she argues that the investigation conducted by DGGI, Hyderabad, should not be equated with a Police investigation. According to her, custodial interrogation of the Accused is imperative. Notably, the Respondent/A.1 served as an Additional Director of the Company for a mere 47 days. Referring to Section 161 of Cr.P.C., she points out statements from witnesses that indicate the Accused, albeit for a short duration as a Director, actively participated in the company's affairs. Furthermore, as the son of a former Minister, he allegedly exploited his position successfully to obtain input tax credit from the erstwhile Government. 8. The learned Special Public Prosecutor contends that DGGI, Hyderabad's investigation is confined to determining the evasion of input tax credit by the AVEXA company and issued a show cause notice for the payment of Rs. 16/- crores as a penalty under section 74(1) of the provisions of the CGST Act, 2017; the investigation done by DGGI, Hyderabad unit established that M/s. Avexa company is in conspiracy with shell companies, created fake invoices, and committed misappropriation of tax amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the N9 road from Uddandurayunipalem to Nidamarru in Amaravati on a subcontract basis. 11. The learned Special Public Prosecutor contends that the investigation revealed that Avexa had issued outward invoices having a taxable value of Rs. 23,43,92,315/- along with GST of Rs. 2,81,27,078/- to M/s. BSR Infratech India Private Limited implies that Avexa received a total amount of Rs. 26,25,19,393/- from BSR Infratech Private Limited, the principal contractor. But the statement of Sri Kurra Jogeswarao, present director of Avexa, recorded by the investigation officer of DGGI on 22.07.2022, shows that "they have not provided any services to M/s. BSR Infratech India Limited." Therefore, as per the investigation, M/s. Avexa has transferred funds to the above fake entities outside the state of Andhra Pradesh, and Avexa only received inward bills/invoices without receipt of Goods/Services from them. 12. It is not in dispute that Avexa has received a work order regarding the investigation design and construction of roads and utilities in the green buffer of N6 road in Amaravati capital city from M/s. Jakson Eminence for values of Rs. 19,49,94,000/- and Rs. 35,85,95,506/- dated 28.02.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etain the benefits arising out of, any of the following offences, namely: (a) supplies any goods or services or both without the 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; 16. He further contends by relying on section 134 of the Act, Cognizance of Offences.- No court shall take cognizance of any offence punishable under this Act or the rules made thereunder except with the previous sanction of the Commissioner, and no court inferior to that of a Magistrate of the First Class shall try any such offence. 17. He further contends by relying on section 137 of the Act, Offences by companies.- (1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as additionally considered the remarks provided in the remand report, which highlight that the Directorate General of Goods and Services Tax Intelligence (DGGI) had previously investigated the submission of counterfeit invoice bills by the shell companies associated with the firm. These entities purportedly claimed to be engaged in development activities in the Amaravati region, although no actual work transpired. Consequently, the DGGI recommended a penalty of Rs. 16 crores against A.1's company under the Central Goods and Services Tax Act, 2017. This indicates that the DGGI, Hyderabad, has already undertaken a significant portion of the investigation 21. This is evident from the comprehensive report of the committee regarding the allegations against M/s. Avexa Corporation Private Limited by APSDRI, Vijayawada; the matter originated from a letter sent by the Special Commissioner of APSDRI, Vijayawada, to the Special Chief Secretary, Finance (DP-I) Department. The Special Commissioner requested the forwarding of the letter to the Special Chief Secretary, MA & U.D., for further action. In response, the Commissioner of APCRDA constituted a committee comprised of Chief Engineers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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