The Delhi District Court in its recent order has refused to grant bail to a person accused of fraudulently / wrongfully availing Input Tax Credit (ITC) of more than Rs.10 Crores.
The accused , Raghav Aggarwal to whom bail has been denied is proprietor of M/s Dreams International who is engaged in trading of hardware goods, screws, fasteners, etc and his firm is duly registered under the provisions of GST Act.
The Superintendent, Anti Evasion had earlier sent a notice seeking a payment of Rs. 2,60,44,887 from the assessee on account of alleged fraudulent/inadmissible input tax credit.
The officers of GST then conducted the search however no notice or communication containing any authorization or reason to believe was issued In favor of the officers conducting the search was served upon the applicant. Panchnama was also not provided.
Certain statements were also recorded and the accused was also asked to deposit an amount of Rs.10 lakhs and further a sum of Rs. 20 lakhs was also recovered.
The applicant submitted that the medical condition of the accused is very serious and as per the medical report, the accused is found to be a chronic case of bronchial asthma (COPD), seizure disorder, and epilepsy, and the proper treatment is not provided due to current COVID situation and condition of accused is deteriorating day by day.
The main plea of the accused is that the arrest memo is vague and there is no definite disclosure under which offense, the accused is arrested. Further that there is no proper notice u/s 41 prior to arrest which is mandatory in terms of Arnesh Kumar Judgment. It was also submitted that arrest is completely arbitrary as there is no adjudication of any tax liability outstanding or contravention of provisions of GST Act before arrest.
However, it is categorically stated by the complainant that the accused was arrested under section 132(c) read with section 132(5) of CGST Act and this was duly communicated in remand application and mere mentioning of provisions in arrest memo which is cyclostyled is no ground to assume that accused was illegally arrested.
The Coram consisting of Special Judge, Ajay Kumar Jain observed that there is a specific evaluation for availing fraudulent ITC of more than Rs.10 crores from various bogus firms which are non existent and there is likelihood during investigation that other bogus firms will come on record so that this fraud will be much more than Rs.10 crores.
The court in its order stated that the case of the accused was under investigation for a long and it was not the case that the accused was abruptly arrested. There is no mandatory requirement of adjudication when the offense found to be committed under section 132 GST Act.
The court while dismissing the plea of the bail held that the medical condition of the accused is not such that he cannot be treated inside the jail for the chronic illness suffered by him or that his condition is serious.
READ / DOWNLOAD ORDER:
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