GST Evasion: Gujarat HC refuses Anticipatory Bail to Directors of Company allegedly involved in wrongfully availing ITC on the basis of Fake Bills [Read Judgment]

The Gujarat High Court Gujarat HC refused the Anticipatory Bail to Directors of Company allegedly involved in wrongfully availing ITC on the basis of fake bills.

The applicants, Nileshbhai Natubhai Patel, Divya Arvindbhai Monpara, Rohitbhai Bhikhabhai Chauhan are the Directors of the Madhav Copper Limited who are allegedly claimed to purchase the material worth Rs.762.00 crores, which in fact has not purchased but fake bills have been obtained so as to wrongfully claim Input Tax Credit and the said purchases have been allegedly made from 36 different firms and companies. It is further alleged that the applicants thereby evaded payment of State Tax worth Rs.137.00 crores by claiming wrongful Input Tax Credit as the suppliers have not paid tax to the Government though collected from the applicant’s Company.

The applicants contended that since no FIR has been filed against the applicants, arrest of the applicants under Section 69 of the GGST Act cannot be made. The applicants have submitted that to date, the department has not determined the liability of the applicants after the process of adjudication. It is submitted that even after adjudicating the liability of the applicants, an appeal can be filed before the appellate authority under Section 107 of the GGST Act where there is a provision that if 10% of the liability is fixed by the adjudicating authority is deposited, the stay can be granted.

The single-judge bench of Justice Vipul M. Pancholi while refusing the anticipatory bail said that if the applicants are enlarged on anticipatory bail then, there are all chances that the applicants will tamper with the evidence and witnesses and at the time of trial, the applicants would not be available.

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