No Bail for Availing Fake ITC Benefits: Punjab and Haryana HC

In order to curb the sudden rise in fake ITC cases, The Punjab and Haryana High Court has rejected the petition for the grant of bail of the petitioner. “The petitioner Mohit Bathla had prayed for granting regular bail for offence as per Section 132(1)(b) and 132(1)(c) that is punishable as per Clause L(i) of Section 132(1) of the Central Goods and Services Tax, 2017.”

The aforesaid petitioner put forth the argument that the “accounts of the firm” of the petitioner have already been examined by GST officers and as “per the statement (bearing date February 12, 2020) after the verification of the copies of various Goods and Services Tax Returns and reconciliation of Input Tax Credit Claim, nothing suspicious was found.”

The petitioner further submitted that for bringing the claim as per Clause (i) of Section 132(i) of the CGST, 2017, different amounts of ITC were clubbed so as to deliberately put the figure above Rs.500 lacs and to attract maximum punishment and consequently, no proper procedure has been followed.

The petitioner further submitted that there is the absence of bogus or fake invoices and no false claim have been made by him as he had filed/submitted all the documents (that is related to the transactions from time to time with the respondents) as per the procedure that is laid down in the Rules of the CGST, 2017.

The petitioner put forth the claim that no complaint against him has been filed And he had been detained under Section 132 of the CGST, 2017. Coming to the respondent-authorities, they opposed the prayer of the petitioner on the following grounds

1. The complaint has previously been filed against the petitioner after documenting the statement of one witness namely Chander Parkash.
2. Respondent-authorities have considered/relied upon various documents and after verification, all the documents that have been submitted by the petitioner it was observed that the firm of the petitioner had received invoices without the actual supply of goods from fake/bogus firms.

Having said that, The single-judge bench of Justice Arvind Singh Sangwan reached the conclusion that the major allegations against the petitioner are related to the availing of a fake Input Tax Credit limit of 4 firms. On clubbing the same, the amount that has been calculated is nearly Rs 18 crores. However, taking into consideration the fact that the detention of the petitioner is less than 3 months, it is not apt to grant the concession of regular bail to the petitioner.