“Where the accused persons are charged with violations of the CGST Act, involving colossal loss of revenue to the exchequer and the investigation is at a very nascent stage, prudence demands that this court should lay off its hands from investigation and allow complete independence to the prosecuting agency to proceed further with the investigation”, said Justice Anand Venkatesh, in his order.
In the legal proceedings, it has been observed many of the people and business firms have been cheating to the customers by providing fake invoices even without rendering the supply of goods and services as well as getting the fake invoices without availing the receipt of goods. Interestingly, all of them are availing the benefit of the input tax credit by showing fake invoices to cheat the government reserves.
Recently, the nine people were arrested recently as they had issued fake invoices even without rendering the supply of goods and services as well as attained fake invoices without receipt of goods. These kinds of cases are registered under the committed offences of the CGST Act, 2017.
In the whole process, the government reserves had to bear heavy losses, of over thousands of crores.
The court stated that the authority should be given to the Goods and Service Tax Network department to inspect such kind of cases as it comes under the national interest.
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Judge said in a court, “This court, by entertaining the petitions and by imposing certain conditions, should not tie the hands of the department in proceeding further with the investigation since what has been unearthed till now is only the tip of the iceberg and there is a long way to go for it to find out how long these fake invoices have extended their tentacles.”
The Judge said in a Madras High Court, “However, it is a settled proposition of law that this court while considering a petition for advance bail, has to necessarily take into consideration the nature and gravity of the accusation. By adding that, When a case involves serious offences, grant of the relief by itself will cause prejudice to the investigation”.
Whenever the tax department realized that the legal compliances of the GST act were misused by showing fake invoice and input tax credit was utilized by the people without any movement of goods, it would be further investigated to curb any bigger scam.
