2024:BHC-NAG:1006 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH, NAGPUR CRIMINAL APPLICATION (BA) NO.19/2024 Rahul s/o Kamalkumar Jain ..vs..

Director General of Goods and Service Tax Intelligence, Nagpur Zonal Unit, thr. Sr. Intelligence OfÏcer, Nagpur ...............................................................………………...........................................................................……………

OfÏce Notes, OfÏce Memoranda of Coram, appearances, Court orders or directions Court's or Judge's Order and Registrar's orders ...............................................................………………...........................................................................……………

Shri Sahil Dewani, Counsel for the Applicant.

Shri S.N.Bhattad, Counsel for the Non-applicant.

CORAM : URMILA JOSHI-PHALKE, J.

CLOSED ON : 15/01/2024 PRONOUNCED ON : 25/01/2024

1. Heard.

2. The applicant has filed the application seeking bail in connection with Case No.DGGI/INTL/1082/2023 registered for offences punishable under Sections 132(1)(b), 132(1)(c), 132(1) (i) read with Section 132(5) of the Central Goods and Services Act, 2017 (the CGST Act, 2017 ).

3. The applicant is arrested on 28.11.2023.

4. The allegations against the applicant are, that he is proprietor of M/s.Arihant Traders and apart from the said firm, he is responsible for management and affairs of firms namely Mehal Construction and suppliers and Mehal Associates registered on one single PAN. He has also committed tax fraud of Rs.144.65 crores by availing admissible ITC of Rs.20.14 crores and has also passed on admissible ITC of Rs.17.73 crores. It is further alleged that the applicant also used to operate and look after few other trade firms namely Aditya Trading Company, Prashant Traders in the same premises. Thus, allegation in a nut shell is that the applicant has obtained GST Registration on fictitious documents and has never conducted any business activity from the registered premises and illegally claimed refund of accumulated ITC on account of trade/supply of goods and contravened provisions of the CGST Act, 2017.

5. The Directorate General of GST Intelligence (DGGI) Nagpur, Zonal Unit, Nagpur has conducted a search on 22.11.2023 at the resident of the applicant in respect of the aforementioned trade firms pertaining to its transactions of sales and supply etc. During the course of the said search, three mobile phones of the applicant are seized. Based upon this search, it was found that trade firm viz. Arihant Traders belonging to the applicant is not in existence and no document of any kind of business activity of the said trade firm was found. It further alleged that another trade firms viz. Mehal Construction and Supplier had not declared any supplies in GST Returns. Thus, the applicant failed to give any documents regarding huge trade amongst firms alleged to be managed by the applicant. Thus, the applicant through the said fake and bogus business firms has shown fake transactions and has claimed ITC (Input Tax Credit) over the said sale/transaction and thereby committed the offence.

6. Learned counsel Shri Sahil Dewani for the applicant, submitted that with false allegations, summons was issued to the applicant under Section 70 of the CGST Act, 2017 dated 28.11.2023 and the applicant was called to remain present with allegation of evasion of GST. Despite the said summons dated 28.11.2023, he was called to appear at 5:30 in the evening. Though the summons was showing the timing of the evening, he was called at 1:30 pm under the garb of unlocking his phone which was seized. Accordingly, the applicant has attended the ofÏce and he was shown to be arrested. There was non compliance in view of Section 41A of the Code of Criminal Procedure. It is further submitted that during the search, the prosecution did not find any incriminating document with regard to sale and purchase on the portal of GST Department. The prosecution in its search and seizure seized as many as 161 pages as