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TMI Blog2024 (10) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (ST), Narayanguda, MJ Market Circle, Abids Division, Hyderabad in Case No. AC(ST)/NG/MJM/1/2023 on the file of Special Judge for Economic Offences at Hyderabad against the petitioners and one Kusum Agarwal. The respondent No. 2 addressed intimation letter dated 28.12.2023 vide Letter No. AC/NG/MJM/1/2023 intimating about the arrest of Smt. Kusum Agarwal. The petitioners were also apprehending their arrest and therefore filed the Criminal Petition seeking anticipatory bail to enlarge them on bail in the event of their arrest in respect of Case No. AC(ST)/NG/MJM/1/2023. 4. Heard Sri V. Chandrasen Reddy, learned Senior Counsel for the petitioners and Sri Swarup Purella, the learned Special Government Pleader representing Additional Advocate General for the respondents. 5. Learned counsel for the petitioners would submit that the petitioners' firm namely M/s. Bengal Cold Rollers Private Limited would supply steel straps regularly to M/s. KLSR Infratech Limited who in turn was in the business of manufacturing / trading of steel straps and supply steel straps to various clients across India. M/s. KLSR Infratech Limited was due an amount of Rs. 1,84,13,128/- (Principal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making huge payment due to the petitioner. 5.2. He further submitted that the petitioner was doing transactions with M/s. KLSR since 2019 and there were no allegations of any kind of fraud or manipulation in respect of transactions pertaining to petitioners' company and when M/s. KLSR company was due huge amounts payable to the petitioner for supply of raw material, the present story had been cooked up to avoid making payment, which was illegal, arbitrary and purely collusive. 5.3. He further submitted that as per the series of events that took place, the petitioner had initiated proceedings before NCLT, Hyderabad under Section 9 of Insolvency and Bankruptcy Code, against M/s. KLSR Infratech Limited in the month of May, 2022 claiming amount due as on 27.05.2022. M/s. KLSR filed counter with same untenable allegations. The NCLT adjudicated the matter and after hearing both sides, ordered the petitioners' application. NCLT had ordered for initiation of Corporate Insolvency Resolution Process of M/s. KLSR Infratech Limited and Mr. Manjeet Bucha was appointed as Interim Resolution Professional. It was only after the petitioner approached NCLT, M/s. KLSR Infratech Limited as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LSR, only to avoid making payment. It was only in continuation of report of GST, the present case was booked against the petitioners the Directors of M/s. Bengal Cold Rollers Private Limited by respondent No. 2. The fact that GST rendered their opinion by way of reply to the Police Officials, even before issuing any show cause notice to the petitioners itself was enough to prove the collusion between M/s. KLSR and GST Department. In this regard, as per the complaint, the entire evidence had been destroyed. In such a scenario, it was completely beyond comprehension as to on what basis an opinion was formed by the GST Department about the nature of E-Way Bills, invoices and LCs. This would clearly indicate that the opinion of GST was purely on the basis of assumptions without any concrete evidence at the behest of M/s. KLSR to target and fix the petitioners. In respect of allegation of fake invoices, the petitioner immediately after despatch of raw material to M/s. KLSR Infratech Limited, raised Way Bill paying the GST. The raw material reached M/s. KLSR and the same could be established from the fact that M/s. KLSR had availed the ITC (Input Tax Credit), which was sufficient evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment (2020) 13 SCC 791 observed that in cases pertaining to economic offences having an impact on the society, the Courts should be slow in exercising discretion for granting anticipatory bail under Section 438 of Cr.P.C. and contended that prima facie case of serious economic offence and fraud resulting in loss of more than Rupees Five Hundred Lakhs to the State exchequer was made out against the petitioners. The petitioners were highly influential persons. If they were granted pre-arrest bail, there was every possibility of tampering of evidence and influencing the witnesses, which would have a bearing on the investigation and prayed to dismiss the Criminal Petition. 7. The learned Senior Counsel for the petitioners on the other hand contended that the decision of P.V. Ramana Reddy v. Union of India (cited supra), was neither applicable to the facts of this case nor on law, as the point for consideration therein was that whether writ jurisdiction under Article 226 of the Constitution of India could be used as a substitute to Section 438 of Cr.P.C. and the direction of the Court was on the principle that the jurisdiction under Article 226 of the Constitution of India to grant pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... photocopies of books of accounts, documents and records, etc., so that the petitioners could verify the same and draft the proper reply, but the Assistant Commissioner (ST), Basheerbagh-Nampally Circle did not acknowledge the affidavit till 09.02.2024. On 09.02.2024, he acknowledged the petition but did not issue the photo copies of books of accounts, document and records, loose slips and papers and did not return the Computer CPU and Laptop till date. The petitioners had e-mailed the said petition to the Assistant Commissioner (ST), Basheerbagh - Nampally Circle, the Joint Commissioner (ST) Abids Division and the Commissioner (SGST) on 27.02.2024, but till date, the petitioners did not receive any reply from them. The act of the GST Officials appeared to be like forcing the horse to run after tying its legs. 12. He further submitted that the GST Officials proposed to levy GST basing on the loose slips seized by GST Officials. The petitioners had tagged the information of loose slips which GST Officials had mentioned in their annexures by producing the sales details / job work and proof of payment of taxes accordingly within the due dates. The Assistant Commissioner (ST), Basheerb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomic offence as it is usually the case in offences under other special statutes dealing with economic offences like Prevention of Money Laundering Act, 2003. Thus, as per the scheme of the CGST Act, though the offence is of economic nature yet the punishment prescribed cannot be ignored to determine the heinousness of the offence. To conclude, in my view the offences under the Act are not grave to an extent where the custody of the accused can be held to be sine qua non. 52. In the present case, the Petitioner has been accused of wrongfully utilizing the Input Tax Credit amounting to Rs. 72 Crores, an offence under Section 132(b) and (c). Since the alleged amount exceeds five hundred lakhs, the accused can be punished with a maximum of five year of imprisonment and with fine. It is equally important to highlight that the offences under the Act are bailable and non-cognizable except for the offence under Section 132(5) of the Act. Additionally, under Section 135 of the Act, in any prosecution under the Act requiring culpable mental state, the court is bound to presume culpable mental state of the accused. The section further states that the accused will have a defense to prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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