Orissa HC grants bail to person accused of falsely using and transmitting ITC on behalf of bogus companies


Orissa’s High Court has granted bail to a person accused of wrongly using and spending an input tax credit (ITC) on behalf of bogus companies.

The applicant, Smruti Ranjan Sahoo, who is in custody for committing offenses punishable under section 132 (1) (b) (c) and (1) of the Goods and Services Tax Act 2017 of Odisha, by filing this application under Article 439 of the Cr.PC for his release on bail.

It was alleged that the applicant is the owner of M / s. SR companies in collusion with others had managed to show receipt of purchase invoices on behalf of bogus companies without physical receipt of the goods and issue sales invoices without subsequent physical movement of the goods and thus misused and transferred a bogus input tax credit (ITC) on the basis of these bogus invoices by defrauding the Treasury. It is also said that there was a supply of goods purchased on accounts from underground sources without obtaining invoices and without paying taxes in addition to the establishment and operation of shell companies in the name and style of M / s Kuladia Traders and others in collusion with a Sri Sandip Mohanty and others to the tune of Rs.10.75 and Rs.6.25 crores and therefore it is said that there has been the use and passing of fake ITCs in the name of said companies as alleged.

The Applicant argued that he made all genuine sales and purchases of goods using the genuine GSTN and paid GST. It was therefore argued that the Applicant is not in any way involved in the commission of offenses as alleged and that he was arrested in the case for frivolous reasons without determining liability for tax and by an erroneous calculation. of the ITC as alleged when it is said that the accused Sandip Ku. Mohanty is the main accused and this petitioner is said to have colluded with him.

The Single Chamber of Judge D. Dash noted that approximately five months have passed since the applicant’s detention in custody and therefore these stages of the investigation here appear to be over when it can be said that the applicant released on bail can remain on bail. the manner of a proper investigation in the collection of all the elements triggering the derailment of the investigation process with the possibility for the applicant to influence witnesses and to flee on which there are also no details important.

The court ordered that the applicant be released on bail by providing a bond of Rs.35,000,000 with two bonds for the same amount to the satisfaction of the court.

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