Sumit Dutta S/O Shri Vinod Dutta Patner Msr Veto Merchandise Jaipur vs. Union Of INDIA

Held

The Court considered the contentions put forth by both the petitioner and the learned Public Prosecutor. While the petitioner argued for bail based on his resignation, proof of actual goods movement, and the bail granted to a co-accused, the respondent highlighted the serious allegations of claiming Rs. 47 crore as Input Tax Credit (ITC) without actual transportation of goods, using fake bills and invoices, and passing it on to shell firms. The Court found the arguments presented by the learned Public Prosecutor to be persuasive. Consequently, the Court was not inclined to grant bail to the petitioner. The reasoning appears to be based on the gravity of the alleged financial fraud involving a substantial sum and the alleged use of fraudulent means to claim ITC, which suggests a prima facie case against the petitioner. The Court's decision to reject the bail application indicates that it found sufficient grounds to believe the petitioner's continued detention was necessary pending further investigation or trial. No specific issue was left undecided.

Facts

The petitioner, Sumit Dutta, a partner in M/s Veto Merchandise, filed a bail application under Section 439 of the Cr.P.C. The case involves a complaint registered by the Central Goods and Service Tax & Central Excise Commissionerate, Jaipur, for alleged offences under Section 132 of the CGST Act, 2017. The petitioner claims he resigned in February 2020 and that there was actual movement of goods. He also points to a co-accused, Bhasker Jangir, who was granted bail. The respondent, Union of India through the Superintendent, Anti-Evasion, CGST Department, Jaipur, opposes the bail. The respondent contends that the petitioner was a partner at the relevant time and that input tax credit (ITC) of Rs. 47 crore was claimed without actual transportation of goods, based on fake bills and invoices, and passed on to shell firms.

Key Issues

1. Whether the petitioner is entitled to bail under Section 439 of the Cr.P.C. considering the allegations of claiming Input Tax Credit (ITC) of Rs. 47 crore without actual movement of goods, based on fake bills and invoices, under Section 132 of the CGST Act, 2017? Petitioner's Contentions: The petitioner argues that he was an employee of M/s Veto Merchandise and resigned in February 2020. He claims to have furnished details demonstrating actual movement of goods. Furthermore, he contends that a co-accused, Bhasker Jangir, has been granted bail by this Court. The offence is punishable by five years imprisonment and is triable by a Magistrate. Respondent's Contentions: The respondent argues that the petitioner was a partner in M/s Veto Merchandise at the relevant time. They allege that a sum of Rs. 47 crore was claimed as ITC without any transportation of goods, utilizing fake bills and invoices to pass on ITC to firms that existed only on paper. The total sum involved is stated to be Rs. 47 crore.