Delhi High Court - Orders
Yogesh Kumar Goyal vs Directorate General Of Gst ... on 30 September, 2021
Author: Mukta Gupta
Bench: Mukta Gupta
$~41 & 42
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ BAIL APPLN. 3257/2021
YOGESH KUMAR GOYAL ..... Petitioner
Represented by: Mr.Ramesh Gupta, Sr.Advocate with
Mr.Shailendra Singh, Mr. Ishaan Jain,
Advs.
versus
DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI)
..... Respondent
Represented by: Mr.Harpreet Singh, Sr.Standing
Counsel with Mr.Arunesh Sharma
and Ms.Suhani Mathur, Advocates for
respondent.
+ BAIL APPLN. 3401/2021
KRISHAN KUMAR BANSAL ..... Petitioner
Represented by: Mr. Saurav Aggarwal, Mr. Ashish
Tiwari, Mr. Vibhu Anshuman, Mr.
Ananvay Anandvardhan, Ms. Kavya
Pahwa, Advs.
versus
UNION OF INDIA & ANR. ..... Respondent
Represented by: Mr.Harpreet Singh, Sr.Standing
Counsel with Mr.Arunesh Sharma
and Ms.Suhani Mathur, Advocates for
respondent.
CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA
ORDER
% 30.09.2021 The hearing has been conducted through Video Conferencing.
1. By these petitions the petitioners seek regular bail in the Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 1 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 investigation/inquiry carried on by the respondent in DZU/INV/GST/A894/2021 registered under Sections 132(1)(b) & (c) of the Central Goods and Services Tax Act 2017 (in short CGST Act).
2. According to the respondent, on an investigation/inquiry carried out a complaint has already been filed against the petitioners before the learned Trial Court with the allegations that M/s. Jetibai Grandsons Services India Pvt. Ltd. (in short JGSIPL) along with various other firms including M/s. Urja Global Limited (in short Urja) of which petitioner Yogesh Kumar Goyal is a Director are allegedly involved in fraudulently availing and passing on ineligible/ fake Input Tax Credit (in short ITC). As per the respondent M/s. JGSIPL purportedly showed itself as engaged in procurement of Battery (HSN 8507), Solar Panel (HSN 8541) and also as receiving Job Work Services (HSN 9988) attracting GST @ 28%, 5% and 18% respectively, showing purchases mainly from three entities including M/s. Urja. On verification it was found that though Urja was showing itself as receiving these goods from various firms, however the said firms were found non-existent at their registered premises. Further, suppliers in the supply chain of M/s. Urja had no inward supplier. It is thus claimed that in a short span of 5 months i.e. from November 2020 to March 2021 M/s. Urja has availed and fraudulently passed on ineligible ITC amounting to ₹17.2 crores to M/s. JGSIPL.
3. It is alleged that thereafter, M/s JGSIPL cleared the goods and services as "Solar Power Generating Unit" (HSN 8543) attracting GST @ 5% and by way of "Other Support Services" (HSN 998599) attracting GST @ 18% utilized the ineligible ITC so availed, at the time of discharging its output tax liability. On searches being conducted at the principal place of Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 2 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 business of M/s. Urja at Netaji Subhash Place, no firm at the given address was found. Further, additional place of business of Urja at Peeragarhi was found operational, however no manufacturing activity was being undertaken at the said place.
4. In the statement of the petitioner, Yogesh Kumar Goyal recorded on 20th July, 2021 he stated that the invoices without transaction of goods were issued under his knowledge and on the basis of the said invoices JGSIPL has availed and utilized ineligible ITC of ₹17.21 crores and that M/s. Urja has made no inward purchase as mentioned in the invoices and just ITC has been passed on to M/s. JGSIPL. Petitioner Krishan Kumar Bansal is the CFO of M/s. JGSIPL. Further the analysis of the electronic data of M/s Urja, which Yogesh Kumar Goyal relied shows that it purchased goods from M/s Tech Metallic and M/s Vision Metal Industries, however payments including GST to the tune of ₹18 crores approximately still pending to be made to them even after a span of six months which also renders the input tax credit availed on such purchase ineligible under Section 16 of the CGST Act, 2017.
5. As per the Status report, further verifications were also carried out from the various transporters who purportedly transported the goods and four transporters, namely, Rama Tempo Transport Service, Jain Transport Service, Shiv Transport Company & Haryana Transport were found non- existent. It was thus revealed that M/s. Urja has received invoices without actual receipt of goods from various suppliers, who are either non-existent or their registrations are cancelled. Thus, Yogesh Kumar Goyal being the Director of M/s. Urja has played the fraud in not only availing and utilizing ineligible ITC fraudulently but also passing on the same to other non-
Signature Not VerifiedBAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 3 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 existent firms thereby causing huge revenue loss to the Government exchequer.
6. It is further alleged that M/s. Microlyte Energy Pvt. Ltd. (in short Microlyte) has also shown itself as receiving these goods from various firms, which firms have also been verified and found to be non-existent at their registered premises. Petitioner Krishan Kumar Bansal is the Director of M/s. Microlyte and CFO of M/s. Urja. Krishan Kumar Bansal was appointed Director of M/s. Microlyte in November 2020 and during November 2020 to March 2021 M/s. Microlyte fraudulently claimed ITC of goods and services having value of ₹300 crores approximately and involving ITC of ₹55.10 crores and utilized the same for discharging their outward tax liability by showing the sale of goods to M/s. Sun Automation Ltd. and services to M/s. JGSIPL.
7. In his statement recorded under Section 70 CGST Act 2017 Krishan Kumar Bansal stated that invoices without the supply of goods were issued and on the basis of said invoices M/s. JGSIPL has availed and utilized ITC worth ₹72 crores approximately, making it a total of fraudulent ITC worth ₹72 crores approximately.
8. Learned counsels for the petitioners have raised various issues in relation to the present investigation/inquiry being carried out by the respondents as also the complaint filed. It is contended that hurriedly on 60th day at 7.00 PM after the Court hours were over so as to frustrate the right of the petitioners to get bail under Section 167(2) Cr.P.C., an incomplete complaint was filed before the Duty Magistrate wherein it is clearly noted that further investigation is going on. Further, though the complaint has been filed against the two individuals, no complaint has been Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 4 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 filed against the company, whereas deposit of tax or availing of the ITC or the evasion if any was done by the company.
9. Learned senior counsel appearing on behalf of Mr. Yogesh Kumar Goel submits that the decision relied upon by the respondent in Criminal Miscellaneous Bail Application No. 15190/2021 has no application to the facts of the case for the reason in the said case entire transaction was done in cash without any invoices and the concern was a proprietorship firm and thus the proprietor of the firm was liable, whereas M/s. Urja is a public limited company duly listed. Further, entire transactions are through banks and the claim of the respondent that there were no sales and only paper invoices were created through fake firms is unwarranted because all the firms in which transactions have taken place were duly registered and GST numbers were allotted to them. It is further contended that the entire evidence is documentary in nature as has been noted in the panchnamas. Learned counsel for the petitioner vehemently contends that the so-called findings arrived at in the complaint could not have been done without an assessment and in any case the claims of the respondents are highly disputable.
10. Learned counsel appearing on behalf of Krishan Kumar Bansal contends that the claim of the respondent that the buyers used Input Tax Credit cannot make the petitioner liable for the reason the petitioner paid due taxes. He further states that the two concerns M/s. JGSIPL and M/s. Sun Automation Ltd. have taken the benefit of ITC whose Directors have not been arrested and no complaint has been filed against them as yet. Statement of the petitioner under Section 136 of the GST Act cannot be treated as a confession unless the same is proved in the Court during the Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 5 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 trial. He states that all offences if any are compoundable and that too post- assessment. Serious issues arise as to the manner in which complaint has been filed which can only be decided by the Assessing Officer and not by a Magistrate during the course of trial. It is further stated that the satisfaction as required under Section 69 of the CGST Act has not been arrived at. It has been repeatedly held by the Courts that it is not only the requirement that an offence is allegedly committed but authority has to also satisfy the need for arrest of the accused.
11. Learned counsel for the petitioner Krishan Kumar Bansal further submits that the present case cannot be classified as an outright evasion of the tax as was the case in the decision rendered by the Allahabad High Court and at best could be a case of re-assessment for which no arrest can be made unless a finding on assessment has been arrived at. Learned counsel for the petitioner contends that the present case is covered by the decision of the Division Bench of this Court reported as 2016 SCC OonLine Del 4951 MakeMyTrip vs. Union of India, as also of the Bombay High Court in 2021 SCC OnLine Bom 200 Daulat Samirmal Mehta Vs. Union of India followed by Division Bench of Bombay High Court in WP(ST) No.5484/2021 dated 11th March, 2021 titled Sunil Kumar Jha Vs. Union of India.
12. Learned Senior standing counsel for the respondent seriously dispute the contentions raised by learned counsels for the petitioners. He states that while determining that paper invoices were created through fake firms, visits were made at the spot where no firms were found existing. Statements of the transporters were recorded out of which only one transport company was found to be existing and no goods were purportedly transported. It is Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 6 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43 contended that not only have the petitioners and their company caused loss to the exchequer, but also that M/s. Urja owes a sum of ₹17 crores approx. to its suppliers whereas M/s. Microlyte owes a sum of ₹50 crores approx. to its suppliers. Reliance is placed on the decision reported as 2019 (25) G.S.T.L. 185 P.V. Ramana Reddy Vs. Union of India.
13. Considering the rival contentions of the parties, parties are directed to file their written submissions. Written submissions be filed by the petitioners within two weeks and response to the written submissions be filed by the respondent within two weeks thereafter.
14. On 11th November, 2021 the BAIL APPLN. No. 2019/2021 is also listed before this Court wherein also considering the issue that without issuance of any show cause notice and with no proceedings qua assessing the exact amount having been initiated, the petitioner therein was arrested, this Court has listed the matter for final hearing and in the meantime released the petitioner on interim bail.
15. Considering the fact that petitioners have been in custody now for 70 days, complaint qua them have already been filed by the respondent and hence their custodial interrogation is not required and the evidence is documentary in nature, this Court deems it fit to release the petitioners on interim bail on their furnishing a personal bond in the sum of ₹1 lakh each with two sureties each of the like amount to the satisfaction of the Trial Court/ Duty Magistrate, further subject to the condition that petitioners will cooperate with the respondents and will join the investigation/ inquiry as and when required by the respondents and will not leave the country without the prior permission of this Court.
16. List these petitions on 11th November, 2021.
Signature Not VerifiedBAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 7 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43
17. The date of 5th October, 2021 is cancelled.
18. Order be uploaded on the website of this Court.
MUKTA GUPTA, J.
SEPTEMBER 30, 2021 'ga' Signature Not Verified BAIL APPLN. 3257/2021 & BAIL APPLN. 3401/2021 Page 8 ofSigned Digitally 8 By:JUSTICE MUKTA GUPTA Signing Date:30.09.2021 20:48:43