Vikas Goel vs. Shankar Prasad Sarma, Deputy Director

Held

The Court granted regular bail to the petitioner. While acknowledging the respondent's assertion of a severe economic offense, the Court took into consideration that the maximum sentence for the alleged offense is 5 years. The Court also noted that the petitioner had been in custody for 16 months and that the challan had been presented. Furthermore, the Court observed that the case involved rotating turnover for availing credit facilities from banks and that tax was paid after adjustment of ITC. Without commenting on the merits of the case, the Court deemed it appropriate to grant bail. The operative direction was to release the petitioner on regular bail to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate, Gurugram.

Facts

The petitioner, Vikas Goel, filed a second petition under Section 439 Cr.P.C. seeking regular bail in a complaint case registered under Section 132 of the Central Goods and Services Tax Act, 2017, and Section 20 of the Integrated Goods and Services Tax Act, 2017. The complaint was filed by the Deputy Director, Directorate General of Goods and Service Tax Intelligence. The allegations involve M/s MICA Industries and its units allegedly engaging in trading and manufacturing, but investigations revealed the creation of firms to issue fake invoices for fraudulent Input Tax Credit (ITC) claims. The revenue alleged that GST of Rs. 68,42,30,780/- was paid fraudulently based on these fake invoices.

Key Issues

1. Whether the petitioner is entitled to regular bail given the allegations of fraudulent ITC claims and the amount involved, considering the maximum sentence prescribed under Section 132 of the CGST Act, 2017? The petitioner argued that the allegations of moving invoices in a circle without actual movement of goods or generation of fake invoices are not entirely accurate. He contended that his companies availed ITC amounting to Rs. 79.21 crore and paid output tax of Rs. 80 crore, suggesting no revenue loss. The petitioner further argued that he made book entries for ITC and GST payments from ITC, and credited Rs. 18.16 crore while paying Rs. 18.37 crore, resulting in an excess payment of Rs. 21 lacs. He relied on a Division Bench decision of the High Court in Akhil Krishan Maggu and another Vs. Deputy Director, Directorate General of GST Intelligence. The petitioner also highlighted that the maximum sentence is 5 years and he has been in custody for 16 months, with the challan already presented. The respondent argued that the case involves a severe economic offense of huge magnitude and that the petitioner's earlier bail application was dismissed on 24.07.2019.