Ravindra Vijay S/O Sh. Kailash Chand 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 and were stated to be part of the same racket as the petitioners. Considering that the petitioners had been in custody since March 26/27, 2021, the complaint had been filed, they were not required for further investigation, the maximum punishment was five years, the offence 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 operative direction was to release the petitioners on furnishing personal bonds and sureties.

Facts

The petitioners, Manoj Vijay and Ravindra Vijay, were arrested by the CGST, Jaipur on March 26 and 27, 2021, respectively, in connection with Complaint File No. IV(06) 40/AE/JPR/2021 for offences under Section 132 of the Central Goods and Services Tax Act, 2017. Their arrest followed an investigation initiated by the DGGI on February 28, 2019, against Kapil Vijay and Mohit Vijay. During that investigation, M/s. Shri Krishna Enterprises (M/s. SKE) was implicated, and its proprietor admitted to availing Input Tax Credit (ITC) based on invoices from firms operated by Kapil Vijay and Mohit Vijay. The petitioners' arrest by CGST was based on a statement recorded on March 2, 2021. The petitioners argued that CGST lacked jurisdiction to arrest them as the DGGI was already seized of the investigation, and the investigation was bifurcated to harass them. They also contended that the alleged wrongful claim of ITC was inflated to ₹5.27 crores to make the offence non-bailable.

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, particularly under Section 132 of the Central Goods and Services Tax Act, 2017? 2. Whether the bifurcation of the investigation between DGGI and CGST was done to harass and victimize the petitioners, thereby rendering the arrests illegal? 3. Whether the alleged wrongful claim of Input Tax Credit (ITC) of ₹5.27 crores was inflated to make the offence non-bailable? Petitioner's Contentions: The petitioners argued that the CGST lacked jurisdiction to arrest them as the DGGI was already investigating the case. They contended that the investigation was bifurcated to cause harassment and that the inflated amount of ₹5.27 crores was to make the offence non-bailable. They also submitted that the complaint had been filed, they were not required for further investigation, and had been in custody since March 26/27, 2021. They relied on the fact that co-accused Mohit Vijay and Kapil Vijay were granted bail by the High Court. Revenue's Contentions: The respondents argued that there were grave allegations of wrongfully availing ITC to the tune of ₹5.27 crores from paper firms and an additional ₹25.27 crores from M/s. SKE, for which a separate complaint was filed by DGGI. They asserted that the investigation was ongoing and that the petitioners were part of a large racket involved in issuing fake invoices worth approximately ₹123 crores. They also pointed to the voluntary statements recorded under Section 70 of the CGST Act, 2017, as proof of guilt and alleged destruction of evidence.