Mahaveer Prasad vs. The State Of Jharkhand

Held

The Court granted anticipatory bail to the petitioner. While the judgment does not explicitly detail a finding on each specific legal question framed, it implicitly acknowledges the petitioner's arguments regarding the procedural prerequisites for initiating prosecution under Section 132 of the Jharkhand Goods and Services Tax Act, 2017. The Court considered the submissions of both counsels and the facts presented, including the petitioner's reversal of the alleged fraudulent ITC and his willingness to cooperate. The reasoning appears to be influenced by the precedents cited by the petitioner, suggesting that the initiation of proceedings under Section 132 without a prior determination of demand under Sections 73 and 74 might be questionable. The operative direction was to release the petitioner on bail upon arrest or surrender, subject to certain conditions including cash security, furnishing bail bonds, cooperation with the investigation, and appearance as and when noticed.

Facts

The petitioner, Mahaveer Prasad, proprietor of M/s. Kanchan Alloys and Steels, is seeking anticipatory bail in connection with a case registered under the Indian Penal Code and the Jharkhand Goods and Services Tax Act, 2017. The allegations include claiming to have transacted business from an address where no business was conducted, submitting a forged rent agreement to obtain a registration certificate, and availing Input Tax Credit (ITC) amounting to Rs. 8,57,30,051.00 based on forged invoices without actual supply. The petitioner claims the rent agreement was forged due to a dispute with the landlord and that he had already vacated the premises and shifted to Rajasthan. He also argues that the prosecution under the GST Act is not attracted due to the existence of a special act and that the proceedings are mala fide. The petitioner has since reversed the alleged fraudulent ITC and is willing to cooperate with the investigation.

Key Issues

1. Whether the prosecution under Section 132 of the Jharkhand Goods and Services Tax Act, 2017, can be initiated without first determining the demand due from the assessee through the assessment process under Sections 73 and 74 of the Act? Petitioner's arguments: The petitioner contends that the power to punish under Section 132 is triggered only after an offence is established, which necessitates prior determination of the demand through assessment. Reliance is placed on the Madras High Court's judgment in M/s. Jayachandran Alloys (P) Ltd. Vs. The Superintendent of GST and Central Excise & Others and the Gujarat High Court's observation in Vimal Yashwantgiri Goswami Vs. State of Gujarat. The petitioner also cites a Supreme Court decision regarding the Finance Act, 1994, arguing that procedures similar to Sections 73 and 74 must be followed before arrest under Section 69 of the GST Act. Revenue's arguments: The learned Additional Public Prosecutor opposes the prayer for anticipatory bail.