Manoj Vijay S/O Sh. Prahalad Vijay vs. Union Of INDIA

Held

The Court allowed the bail applications, directing the release of the petitioners on bail. The Court noted that a Coordinate Bench had previously granted bail to co-accused Mohit Vijay and Kapil Vijay in a complaint filed by the DGGI under the Act of 2017, and this order had attained finality. The Court observed that the entire investigation leading to the petitioners' arrest originated from the investigation against Mohit Vijay and Kapil Vijay, who were alleged to be involved in tax evasion of ₹139.05 crores. The petitioners were stated to be part of the same racket. Considering that the petitioners had been in custody since March 2021, a complaint had already been filed, they were not required for further investigation, the maximum punishment was five years, the offense was compoundable, and co-accused had been released on bail, the Court deemed it just and proper to enlarge the petitioners on bail without expressing any opinion on the merits of the case. The petitioners were directed to furnish a personal bond of ₹1,00,000/- and two sureties of ₹50,000/- each, complying with conditions under Section 437(3) Cr.P.C.

Facts

The petitioners, Manoj Vijay and Ravindra Vijay, were arrested on March 26, 2021, and March 27, 2021, respectively, by the Anti-Evasion, Central Goods and Services Tax Commissionerate, Jaipur (CGST). Their arrest stemmed from an investigation initiated by the Directorate General of GST Intelligence (DGGI) on February 28, 2019, against Kapil Vijay and Mohit Vijay. The DGGI's inquiry led to M/s. Shri Krishna Enterprises (M/s. SKE), whose proprietor admitted to availing Input Tax Credit (ITC) based on invoices from firms operated by Kapil Vijay and Mohit Vijay. The petitioners were arrested based on a statement recorded on March 2, 2021. The petitioners' counsel argued that the CGST lacked jurisdiction to arrest them as the DGGI was already seized of the investigation, and the investigation was bifurcated to harass them. The alleged wrongful claim of ITC was inflated to ₹5.27 crores to make the offense non-bailable. The respondents contended that the petitioners were involved in a large racket issuing fake invoices totaling approximately ₹123 crores and ₹85 lacs, with around 160 beneficiaries, and that the investigation was ongoing.

Key Issues

1. Whether the CGST had the jurisdiction to investigate and arrest the petitioners when the DGGI was already seized of the investigation concerning the same transaction and individuals, thereby violating principles of proper investigation procedure and potentially causing harassment? (Section 132 of the Central Goods and Services Tax Act, 2017) 2. Whether the alleged wrongful claim of Input Tax Credit (ITC) was inflated to ₹5.27 crores with the intent to render the offense non-bailable, and if so, what is the implication for the bail application? Petitioner's Arguments: - The CGST lacked jurisdiction to arrest the petitioners as the DGGI was already investigating. - The investigation was bifurcated to harass and victimize the petitioners. - The wrongful claim of ITC was inflated to ₹5.27 crores to make the offense non-bailable. - The petitioners have been in custody since March 2021, the complaint has been filed, and they are not required for further investigation. - Co-accused Kapil Vijay and Mohit Vijay were granted bail by this Court. Revenue's Arguments: - Grave allegations of wrongfully availing ITC to the tune of ₹5.27 crores and ₹25.27 crores (qua M/s. SKE). - The investigation is still ongoing. - The petitioners are members of a large racket involved in issuing fake invoices worth approximately ₹123 crores and ₹85 lacs. - Voluntary statements recorded under Section 70 of the CGST Act, 2017, prove their guilt. - The petitioners are guilty of destroying evidence. - The bail applications should be dismissed due to wrongful averments claiming the offense to be bailable and non-cognizable.