IMPORTANT POINT
Cancellation of bail – Bail obtained by misrepresenting as well as by suppressing material facts, is always liable to be cancelled.

JUDGMENT (ORAL)

The instant Criminal Miscellaneous Application has been preferred by the applicant under Section 482 CrPC assailing the order dated 27.05.2024, passed by the learned District and Sessions Judge, Rudrapur, District Udham Singh Nagar in Miscellaneous Application No.87 of 2024, preferred on behalf of the State Tax Department under Section 439(2) CrPC, whereby, the bail granted to the applicant by order dated 05.03.2024 in Second Bail Application No. 359 of 2024 was cancelled and the applicant was directed to surrender.

2. Brief facts of the case are that the Deputy Commissioner, Special Investigation Branch (GST-State) being a “proper officer” under the provisions of Uttarakhand Goods and Services Act, 2017 and authorized to file the complaint preferred a complaint on 18.12.2023 in the Court of Chief Judicial Magistrate, Udham Singh Nagar, which was registered as a Complaint Case No. 818/STB/RDP /03/03/2023, against the present applicant for the offences punishable under Sections 132(1)(b), 132(1)(c) and 132(1) of Uttarakhand Goods and Service Tax Act/The Central Goods and Service Tax Act, 2017.

3. Before filing the said complaint, the competent authority, Commissioner State Tax, Uttarakhand in exercise of powers conferred upon him under Section 132(6) of the Uttarakhand GST Act, has accorded sanction for prosecution.

4. The allegations as alleged in the complaint is that two complaints were received on 26.02.2021 and 12.08.2021 with the allegation that huge number of shell firms have been registered and operated by various persons in Jaspur area of District Udham Singh Nagar and these persons have been indulged in issuance and selling of fake invoices of ‘wood swan’/’timber’ to different buyers within the State as well as outside the State on commission basis without causing actual supply of goods, due to which they caused loss of revenue of Uttarakhand Goods and Services Tax and Central Goods and Services Tax to the State Government as well as to the Government of India.

5. On the said complaint, a priliminary investigation was launched by Special Investigation Branch (SIB), State Tax, Rudrapur and an extensive data analysis was done using E-way bill portal and GST back office portal and simultaneously a secret intelligence network was also activated to gather all necessary field information related to the issue. The Field Intelligence gathered certain informations from different sources, which reveals that some persons have been running a nexus of selling of GST invoices and fraudulent generation of e-way bills, fake bilties, Forest (Transit Pass) & Mandi passes without getting actual sale-purchase of wood by using shell firms registered in the name of dummy persons.

6. The investigation reveals that the nexus was started somewhere in July 2019 by a person namely Mohd. Shahnawaz Hussain (present applicant), resident of Jaspur, District Udham Singh Nagar. It also reveals from the SIB that Mohd. Shahnawaz Hussain (present applicant) operates various shell firms registered by him under the GST law using name by fake I.D.s and fake documents of other persons like truck driver, relatives, labour, unknown person, women etc.

7. The investigation further reveals that the said person also operates various other shell firms and he has been indulged in creation, operation and handling of fictitious/shell/fake firms in the name of other persons and using these firms to issue fake invoices without conducting actual movements of goods to pass on fake Input Tax Credit (ITC) to the beneficiary dealers located in Uttarakhand as well as in the State of Haryana, Uttar Pradesh, Delhi etc. The investigation further reveals that this person running many shell firms registered under the GST and MSME also in the name of third person and he kept all documents at his residence and hired some youth for this purpose including for generation of fake invoices, making of e-way bills, transportation of cash, formation of fake firms, debit-cre