Ishithore vs. The Senior Intelligence Officer

Held

The Court dismissed the bail petition. The Court noted that the petitioner was arrested for alleged violations of Sections 132(1)(b) & (c) of the Central Goods and Services Tax Act, with an alleged revenue loss of Rs.120 Crores. A complaint has been filed and taken on record. The respondent alleged that the petitioner routinely floated bogus firms/companies in the names of family members and employees, later including employees, accomplices, and clients as partners/directors. The petitioner also habitually changed partners/directors and business locations. Crucially, the petitioner admitted in a statement dated June 28, 2023, to floating entities in family members' and employees' names, making them proprietors/partners/directors, and issuing invoices, some without actual supply of goods or services, and that many entities have now been closed. Considering the seriousness of the allegations and the revenue loss, the Court was not inclined to grant bail.

Facts

The petitioner, Ishithore, a Chartered Accountant and partner in M/s.John Moris & Co., Tirupur Branch, was arrested on June 29, 2023, and remanded to judicial custody. The Directorate General of GST Intelligence (DGGI), Trichy, alleges that the petitioner floated bogus receipts in his name, his family members', and accomplices' names. He allegedly used third-party fake entries to issue invoices without actual supply of goods or services, circulating Input Tax Credit (ITC) among group entities and passing it on to end-users. The DGGI registered a case (Cr.No.DGG1/INV/GST/2247/2023-GrA-O/ODD-DGGI-RU Trichy) for alleged offences under Sections 132(1)(b)&(c) of the Central Goods and Services Tax Act. A private complaint has also been filed and taken on file as C.C.No.987 of 2023 before the Chief Judicial Magistrate, Trichy. The petitioner seeks bail.

Key Issues

1. Whether the petitioner is entitled to bail in light of the serious allegations of causing a revenue loss of Rs.120 Crores and availing Input Tax Credit without actual transactions, as per Sections 132(1)(b) & (c) of the Central Goods and Services Tax Act? The petitioner's counsel argued that the petitioner is innocent, has not committed any offence, and that the respondent police have not prosecuted other Directors of the firm, only the petitioner. The petitioner has been in custody since June 29, 2023, and is ready to abide by any conditions. The respondent's counsel contended that the petitioner caused a loss of Rs.120 Crores by availing ITC without actual transactions and issuing invoices without supplying goods. The investigation is pending, and a private complaint has been filed. Therefore, bail should be strongly objected to.