Gujarat HC grants bail to defendant allegedly involved in input tax credit evasion

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Gujarat High Court last week granted bail to a defendant allegedly involved in the offense of evading input tax credit under the GST scheme.

The GDST department filed a criminal complaint against the accused plaintiff alleging that M/s. Heugo Metal evaded input tax credit of Rs.4,51,05,130/-. Accordingly, charges under Section 132 (1) (b) (c) (f)(k) (l) of the Goods and Services Tax Act 2017 of Gujarat and the 2017 on Central Goods and Services Tax read with Sections 463 and 120 (B) of Indian Penal Code, 1860 has been imposed. The applicant applied to the High Court to apply for bail.

Judge AS Supehia observed that the total tax evasion of plaintiff’s Heugo Metal company is stated as Rs.4,51,05,130/- or less than 5 crores. It is further revealed that the tax liability of the other company being Dattatrey Corporation, regarding the accused No. 3 is also added and the total tax evasion of the two companies is shown as Rs.7,55,76,378/- ., that is, above 5 crores. The two companies are a separate and distinct identity having different GST numbers.

Granting bail, the Court observed that “the applicant’s residential premises were raided in 2019, more than three years have passed now. Pursuant to orders made by the Bench Division of this Court, the action to set aside the registration of M/s. Heugo Metal was also licensed. Seizure orders also lost their validity. Even if the tax evasion is more than 5 crores, the maximum penalty that can be imposed is five years. It is not disputed by the department that if the tax evasion of the plaintiff is less than Rs 5 crore, then it will be a bailable offense under the provisions of Section 132 (1) (i ) read with Sections 132(4) and 132(5) of Gujarat GST Act and Central GST Act 2017. In view of the above observations, the applicant has prepared their case for the grant of ‘a surety under the provision of Section 438 of the Cr.PC’

Mr Chetan K Pandya appeared for the applicant.

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VIMAL YASHWANTGIRI GOSWAMI v GUJARAT STATE

Counsel for the Appellant: Mr. CHETAN K PANDYA

Counsel for the Respondent: Mr. RONAK RAVAL

CITATION: 2022 TAXSCAN (HC) 342



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