• Notification Date: 01-11-2021
• Notification No: 11/2021-22

GST Evasion: Punjab & Haryana High Court grants Bail to person accused of fraudulently availing ITC without any Invoice

The Punjab & Haryana High Court grants Bail to person accused of fraudulently availing Input Tax Credit (ITC) without any invoice. The petitioner, Krishan Lal Chopra is alleged of the offence committed under Section 132 (1)(c) of CGST Act, 2017 read with Section 20 (xv) of IGST Act, 2017.

The respondent department has argued that Shubham Steels has passed approximately 40% of its ITC to a single firm namely Salasar Castings, Mandi Gobindgarh, whose proprietor is petitioner Krishan Lal Chopra and as per table given in para No.4 of the application, ITC availed by Shubham Steels on purchase made from its dealers is only Rs.12.19 crores and 40% of the same would be around Rs.4.87 crores, qua which the offence is bailable, however, to make it non-bailable, the Department has added certain figures solely based on disclosure of the petitioner (which is not admissible against him), that Shubham Steels has passed on ITC of Rs.5.23 crores. This is done just to make the offence non-bailable as per Section 132 (4) of the GST Act. It is also argued that Atul has not been arrested, whereas upon notice, Shubham has deposited an amount of Rs.50.00 lacs with the Department and similarly, the brother of Shubham, namely Anshu has also deposited Rs.30.00 lacs with the Department and both of them have not been arrested. The petitioner has argued that no show cause notice was issued to the petitioner before arresting him, therefore, no legal procedure was followed, asking the petitioner to deposit any amount, if found short and in pursuance of summons issued under Section 70 of CGST Act, he has been arrested straightway without the following the procedure under Section 69 of CGST Act, therefore, his arrest violates Article 20 of the Constitution of India.

The single-judge bench of Justice Arvind Singh Sanghwan while allowing the petition, granted interim bail to the petitioner.