Ripan Jain vs. Additional Directorate General Of GST Intelligence And Another

Facts

The petitioner, Ripan Jain, sought pre-arrest bail in a complaint filed under Sections 132(1)(b) and 132(1)(c) of the Central Goods and Service Tax Act, 2017 (GST Act) and corresponding provisions of the Punjab GST Act, 2017. The Additional Directorate General of GST Intelligence alleged that the petitioner created three firms – M/s Disha Enterprises, Sarthak Enterprises, and Kashbhi Accessories Point – and engaged in trading using false invoices without actual supply of goods. The petitioner claimed to be falsely implicated, denying any role or proprietorship in the firms. He also contended that the complaint was not supplied to him or co-accused and expressed readiness to join proceedings if protected. The respondents presented statements from Saurabh Goyal, Director of M/s Jay Kay Hosiery Mills Private Limited, recorded under Section 70 of the CGST Act, which indicated the petitioner provided account and GST numbers for the aforementioned firms, facilitating money transfers based on these invoices.

Held

The Court held that the petitioner's complicity in the alleged crime was prima facie well-apparent from the perusal of the statements recorded under Section 70 of the CGST Act. These statements indicated that the petitioner was involved in trading on the basis of invoices without actual supply of goods, and that on the basis of these invoices, income tax rebate of Rs. 84.19 Crore was availed. The Court noted that the statements explicitly detailed the petitioner's role in managing the firms, providing false invoices, and facilitating transactions. The Court found that custodial investigation was necessary to unearth the truth. Consequently, the Court found no option but to dismiss the petition for pre-arrest bail. The Court explicitly stated that these observations should not be construed as an expression of opinion on the merits of the case.

Key Issues

1. Whether the petitioner is entitled to pre-arrest bail in light of the allegations of creating firms and engaging in trading based on false invoices without actual supply of goods, attracting Sections 132(1)(b) and 132(1)(c) of the GST Act? Petitioner's Arguments: The petitioner argued that he was falsely implicated, had no role in the alleged crime, and was neither a proprietor nor a partner of the firms in question. He also contended that the complaint was not supplied to him or co-accused and expressed willingness to join the investigation if granted protection. Respondents' Arguments: The respondents, through statements recorded under Section 70 of the CGST Act, presented evidence suggesting the petitioner's involvement. They argued that the petitioner managed the affairs of the firms, provided account and GST numbers for them, and facilitated transactions based on false invoices. The respondents further contended that the petitioner had deliberately evaded process despite repeated notices, thus not deserving pre-arrest bail.