Ashok Kumar Sihotiya S/O Sh. Anandilal Sihotiya vs. Union Of INDIA

Held

The Court considered the contentions of both parties. Based on the investigation conducted by the Department, the Court found it evident that there was no movement of goods by the petitioner. The petitioner generated fake invoices to avail and pass on ITC, with the fake bills amounting to Rs. 44 Cr. Considering the arguments presented by the Union of India, the Court was not inclined to entertain the bail application. Consequently, the bail application was dismissed. The Court's reasoning focused on the evidence of no movement of goods and the significant amount involved in the generation of fake invoices for ITC purposes.

Facts

The petitioner, Ashok Kumar Sihotiya, filed a bail application under Section 439 of the Cr.P.C. The case involves a complaint filed before the Additional Chief Metropolitan Magistrate (Economic Offences) Jaipur for offences under Section 132(1(ab))(c) of the Central Goods and Services Tax Act, 2017. The allegation is with regard to the transfer of fake Input Tax Credit (ITC) bills amounting to Rs. 7.81 Cr. The petitioner was arrested on February 3, 2021, and a charge-sheet was filed on April 3, 2021. The disputed period is from November 2017 to March 2019. The petitioner claims he was dealing with scrap and that statements recorded under Section 70 of the CGST Act cannot be read against him.

Key Issues

1. Whether the petitioner is entitled to bail under Section 439 of the Cr.P.C. given the allegations of creating and transferring fake ITC bills? The petitioner argued that the conclusion of the trial will take time, and he was merely dealing with scrap, purchasing and selling it to other entities. He also contended that statements recorded under Section 70 of the CGST Act cannot be used against him. The Union of India (respondent) vehemently opposed the bail application, asserting that the petitioner was operating from his residential premises, neither purchased nor sold any goods, and was solely involved in creating fake bills totaling Rs. 44 Cr. The respondent further argued that the petitioner created fake firms and that some entities to whom ITC was transferred admitted to no movement of goods, with fake bills being transferred to 56 suppliers.