Rajasthan High Court Grants Bail to Accused in Fake GST Billing Case; No Department Conclusion on Firm Existence.
The Rajasthan High Court approved bail for a person involved in a fake GST billing scam. The court noted that there was no evidence showing who claimed input tax credits based on the alleged fake invoices, and the Department had not confirmed that the firms were non-existent after proper checks. The High Court reviewed a bail request from the accused under section 439 of the CrPC, linked to an FIR filed under various sections of the Central Goods and Service Tax Act, 2017. Justice Ganesh Ram Meena, on the Single-Judge Bench, stated that considering all facts and circumstances, the court found it appropriate to grant bail without commenting on the case’s merits.
Advocate Brahmanand Sandhu represented the accused, while Special Public Prosecutor Ajatshatru Mina represented the state. The prosecution alleged that the accused, Manoj Kumar Jain, had avoided GST with the help of co-accused Manoj Kumar Sharma. The total input tax credit claimed based on the fake invoices was around Rs 5 crore. Authorities recovered several items from Jain’s business location, including a blank bilty book, a notebook with details of marble and granite sales, loose estimate slips, a file with e-way bills from fake firms, and printouts of WhatsApp chats.
The collected evidence indicated that the petitioner operated nine firms, but seven of them had no incoming supplies. The other two firms had very little incoming supply compared to their outgoing supply, and they were not found at their registered locations. It was claimed that these firms were fake, created to make transportation appear legitimate, which led to a GST evasion of Rs. 20,81,31,977. The petitioner was accused of running these fake firms and issuing false bills and e-way bills. The Bench noted that the petitioner was charged with issuing fake invoices for the nine fictitious firms, which resulted in GST evasion through claims of input tax credit based on these invoices. The complaint stated that the addresses listed for these firms in the GST registration were untraceable, and the owners could not be located.
The respondent Department claimed that the owners of these firms were untraceable, but they did not provide evidence that the firms did not exist after proper checks, nor did they confirm whether the GST registrations for these firms had been canceled. The complaint also revealed that the petitioner received 1% of the taxable value from the alleged fake bills for creating the invoices, while another individual, Manoj Kumar Sharma, received 2% of the taxable value from the same bills. Additionally, it was noted that the investigation into Manoj Kumar Sharma was still ongoing, and no complaint had been filed against him yet. The counsel for the respondent Department could not specify when the investigation into him would be completed.
The court noted that there is no record of who claimed any input tax credit based on the supposed fake invoices linked to the accused petitioner. The court also pointed out that the maximum penalty for the charges against the accused is five years, and the accused has already spent over seven months in custody. The charges are compoundable and can be tried by a Magistrate, and the trial may take a long time. Therefore, the court granted bail, requiring the accused to provide a personal bond of Rs 1 lakh and two sureties of Rs 50,000 each, to be approved by the Trial Court.
Cause Title: Manoj Kumar Jain v. Union Of India
Appearance:
Petitioner: Advocates Brahmanand Sandhu, Parth Sarthi Sandhu & Akash Mathur
Respondent: Special Public Prosecutor Ajatshatru Mina
