Jharkhand High Court
Amit Ranjan vs The State Of Jharkhand .... .... Opp. ... on 27 June, 2022
Author: Subhash Chand
Bench: Subhash Chand
IN THE HIGH COURT OF JHARKHAND AT RANCHI
B.A. No.5318 of 2022
Amit Ranjan ..... ... Petitioner
Versus
The State of Jharkhand .... .... Opp. Party
--------
CORAM : HON'BLE MR. JUSTICE SUBHASH CHAND
------
For the Petitioner : Mr. Rahul Kumar, Advocate
Md. Zaid Ahmad, Advocate
Mr. Rabindra Nath Chaurasia, Advocate
For the State : Mrs. Kumari Rashmi, A.P.P.
Mr. Veervijay Pradhan, A.P.P.
For the Informant : Mr. P.S.A.S. Pati, Advocate
--------
C.A.V. on 27.06.2022 Pronounced on 13.07.2022
Heard learned counsel for the applicant and learned A.P.P. for the State as well as learned counsel for the informant.
2. Learned counsel for the applicant has submitted that a complaint was lodged against the applicant--Amit Ranjan with these allegations that M/s. Manorma Enterprises through its proprietor Pranav Kumar Singh created fake invoices to defraud Government exchequer by way of originating and distributing irregular and inadmissible Input Tax Credit (in short 'ITC') without actually supplying any goods or services as well as without payment of appropriate Goods and Services Tax (in short 'GST') thereon. The periodical GST returns, e-way bill details, bank statements etc. all relating to M/s. Manorma Enterprises indicated that M/s. Manorma Enterprises had not made substantial purchase and sales from any entity. Investigation, in this matter was initiated when in another case related to M/s. Biltu Traders and Exporters, Proprietor--Biltu Debnath, a call history for the period 01.02.2021 to 26.11.2021 was received from Mobile Telecom Service Provider in respect of mobile no.9905833335. This is one of the mobile numbers used during the registration of the above mentioned firm i.e., M/s. Biltu Traders and Exporters which has been -2- declared as fake and non-existent by the Commissioner, CGST & CX, Jamshedpur. It was found that M/s. Manorma Enterprises have not kept any statutory records viz invoices in respect of outward supply and inward supply, party wise ledger in respect of goods supplied and received and payment received etc. at their registered premises and the said taxpayer violated Section 35 of the CGST Act, 2017. Shri Pranav Kumar Singh, the proprietor of the said firm had informed that though the firm M/s. Manorma Enterprises was registered in his name and under his PAN, the business of M/s. Manorma Enterprises was handled by his son--Amit Ranjan (the applicant in this case). He also submitted the mobile no.9905833335 was used by his son Amit Ranjan. Further, statement of Shri Pranav Kumar Singh, the proprietor of M/s. Manorma Enterprises was recorded under Section 70 of the Central Goods and Services Tax Act, 2017 in which he stated that M/s. Manorma Enterprises came into existence in December, 2018 and deals with goods related to building construction materials viz TMT bar, cement, stone chips, sand etc. His elder son Shri Amit Ranjan is looking after and managing all affairs of M/s. Manorma Enterprises including sale, purchase, GST payment and filing of GST return. The mobile no.9905833335 belongs to Amit Ranjan which is being used by him for last four years. Mr. Amit Ranjan in his statement stated that firm--M/s. Manorma Enterprises is being managed by his father along with partner--Sourav Kumar Singh, who worked as accountant. The filing of return under GST was done by him and Sourav Kumar and OTP for the same was received on mobile no.7903179214 and mail id [email protected]. The access of the mail id was with him as well as Sourav Kumar. He had been using mobile no.8709459935, 8987407449, 8083226058 and 9905833335. During -3- investigation, it revealed a large nexus of the people, who were engaged in generation of fake invoices/e-way bills etc. without any actual supply of good and/or services. Shri Amit Ranjan appears to be one of the key conspirators engaged in generation of fake invoices with the sole intention to pass ITC to unscrupulous traders/taxpayers at the cost of the State exchequer. Shri Amit Ranjan was also involved in passing of the fake ITC issued by the fake and fictitious firm i.e., M/s. Biltu Traders and Exporters being solely responsible for the affairs M/s. Manorma Enterprises. Mr. Amit Ranjan had defrauded Rs.1,56,17,731/-. He had also passed on fraudulent ITC to the tune of Rs.3.49 crores through M/s. Builto traders and exporters. M/s. Manorma Enterprised had received meager taxable goods which is referred to as Inward Supply. As per data which has received Inward Supply on taxable value i.e. Rs.1.52 crore during the period December, 2018 to October, 2021 and had made taxable supply to various firms as Outward Supply amounting to Rs.9.44 crore as per GSTR-1. Thus, there is a difference of Rs.7.92 crore between the taxable value of inward supply and that of outward supplies. It is further alleged that Shri Amit Ranjan, who is the proprietor of Manorma Enterprises has fraudulently passed on ITC to the tune of Rs.1.56 crore without actual supply of goods against the fake invoices through M/s. Manorma Enterprises and Rs.3.49 crores through fake and fictitious firm, namely, M/s. Builto Tranders and Exporters. Thus he had defalcated the government exchequer to the tune of Rs.5.05 crores.
3. Learned counsel for the applicant has submitted that the applicant has been falsely implicated in this case on account of misconception of the fact that he used to run the affairs of two alleged firms. It is further submitted that the applicant is neither the proprietor of M/s. Manorma -4- Enterprises nor M/s. Builto Tranders and Exporters as alleged. The applicant has been made accused in this case only on the basis of suspicion and presumption and there is no concrete evidence on record to show his indulgence in commission of the alleged offence. The applicant has been languishing in jail since 17th February, 2022 having no criminal antecedent.
4. Learned counsel for State as well as learned counsel for the informant vehemently opposed the contentions made by the learned counsel for the applicant and contended that the business of both the firms in question was in effective and complete control of the applicant. It is further submitted that he has defalcated government exchequer by way of originating and distributing irregular and in admissible Input Tax Credit without supplying any goods or services as well as without payment of appropriate goods tax and service tax thereon involving huge amount of Rs.5.05 crores. It is further submitted that the statements of Pranav Kumar Singh and Amit Ranjan were recorded under Section 70 of the CGST Act, 2017 in which it is specifically stated by them that Amit Ranjan was looking after the affairs of the M/s. Manorma Enterpresises and mobile no.9905833335 was used to carry out the affairs of M/s. Builto Tranders and Exporters by Amit Ranjan which was found in possession and use of Amit Ranjan which has been confirmed by multiple sources such as, mobile telecom operator, father of Amit Ranjan and other persons, namely, Rajan Kumar Pandey, Nitesh Kumar Pandey, Sourav Kumar and Anurag Maharana whose statements were also recorded under Section 70 of the CGST Act. As such, the contention of learned counsel for the applicant that the applicant had no concern with this firm is belied. The statements of Pranav, Amit Ranjan, Ranjan Kumar -5- Pandey, Nitesh Kumar Pandey, Sourav Kumar, Anurag Maharana were recorded under Section 70 of the CGST Act are made annexures to the counter affidavit filed on behalf of the informant. These statements recorded under Section 70 of the CGST Act are relevant in view of Section 136 of the said act to prove the prosecution case.
5. For disposal of this bail application, the following provisions of the CGST Act, 2017 are being reproduced as under:-
Section 69 of the Act, 2017 provides:-
69. Power to arrest.--(1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause
(i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.
(2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.
(3) Subject to the provisions of the Code of Criminal Procedure, 1973(2 of 1974),
(a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate;
(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station.
Section 70 of the Act, 2017 provides:-
70. Power to summon persons to give evidence and produce documents.-- (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a "judicial proceedings" within the meaning of -6- section 193 and section 228 of the Indian Penal Code (45 of 1860).
Section 132 of the Act, 2017 provides:-
132. Punishment for certain offences.--(1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely:-
(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;
(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;
(c) avails input tax credit using such invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;
(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;
(e) evades tax or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act;
(g) obstructs or prevents any officer in the discharge of his duties under this Act;
(h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;
(i) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;
(j) tampers with or destroys any material evidence or documents;
(k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or
(l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section, shall be punishable
(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine;
(ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the -7- amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine;
(iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine;
(iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. (2) Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.
(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, be for a term not less than six months.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, except the offences referred to in sub-section (5) shall be non- cognizable and bailable.
(5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable. (6) A person shall not be prosecuted for any offence under this section except with the previous sanction of the Commissioner.
Explanation.--For the purposes of this section, the term tax shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act.
Section 136 of the Act, 2017 provides:-
136. Relevancy of statements under certain circumstances.-- A statement made and signed by a person on appearance in response to any summons issued under section 70 during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,--
(a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained -8- without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or
(b) when the person who made the statement is examined as a witness in the case before the court and the court is of the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice.
Section 137 of the Act, 2017 provides:-
137. Offences by companies.-- (1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. (3) Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.
(4) Nothing contained in this section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
Explanation.--For the purposes of this section,
(i) "company" means a body corporate and includes a firm or other association of individuals; and
(ii) "director", in relation to a firm, means a partner in the firm.
6. The Hon'ble Apex Court in the case of K.K. Ahuja vs V.K. Vora And Another) reported in (2009) 10 SCC 48 has held as under :-
"Vacarious liability should fulfill the 'legal requirement' of being a person in law under the statute governing companies responsible to the company for the conduct of the business of the company and also fulfill the 'factual requirement' of being a person in charge of the business of the company."-9-
From the evidence collected by the prosecution, the applicant is found to conduct the business of both the firms in question and he is the key person in both the firms in originating and distributing all the irregular and inadmissible Input Tax Credit which is being used by the firm for discharging their GST liability, though with consent and connivance of proprietor of said company, namely, Pranav Kumar Singh.
7. The Hon'ble Apex Court in the case of Y.S. Jagan Mohan Reddy vs C.B.I reported in 2013 (7) SCC 439 has held as under :-
"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."
8. The Hon'ble Apex Court in the case of State Of Gujarat vs. Mohanlal Jitamalji Porwal and Ors. reported in 1987 (2) SCC 3645 has held as under:-
"..........5. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest............"
9. In view of the submissions made and materials on record, I am not inclined to enlarge the applicant on bail. Accordingly, the bail application of the applicant is, hereby, rejected.
(Subhash Chand, J.) Rohit/AFR