Delhi court grants bail to man accused of Rs 111.92 crore tax fraud

By Sushil Batra
New Delhi [India], March 6 : A Delhi Court on Saturday granted bail to a person allegedly accused of wrongfully availing and passing Input Tax Credit (ITC) on purchase and sale of goods by issuing fake invoices without actual delivery of goods and causing loss to the government to the tune of Rs 111.92 crores.
Sanjay Khanagwal, Additional Sessions Judge, Patiala House Courts in New Delhi granted bail to Mohinder Kumar on a personal bond of Rs 5 lacs with one surety of like amount.
Advocates Vijay Aggarwal. Mudit Jain and Nagesh Behl appearing for the accused argued that Rs 57.39 crores which have been averred as the amount availed as a fraudulent ITC and the amount of Rs 54.53 crores which have been shown as passed on amount of ITC, the accused cannot be said to be liable for the entire amount as the difference is merely Rs 3 crores and out of which accused has already deposited a sum of Rs 1.14 crores.
Advocate Vijay Aggarwal also argued that in the case of fake billing, there is no loss to the exchequer as the government is not entitled to anything if both arises as to where is the loss to the government. He said that as the offence is punishable with imprisonment for five years then the arrest cannot take place so casually. He also challenged the arrest memo stating that there can be no arrest memo unless and until the liability has been determined.
Advocate Aggarwal further argued that in accordance with the provision of section 132 of GST Act 2017, the liability of the accused is less than Rs 5 crores therefore, in terms of section 132(5) of the CGST Act, the offence is bailable and accused has been wrongly arrested in this case. He also argued that bail cannot be withheld as a punishment and bail is the rule and jail is the exception.
Meanwhile, advocate Harpreet Singh appearing for the department contended that the accused is a proprietor in two firms namely VMW Enterprises and Shree Bahadur Steel Company, and upon the physical verification of these two firms both firms were found as non-existent. "Moreover, accused was found operating these two firms only to avail and pass on the ineligible fraudulent input tax credit," said Singh.
According to the GST department, accused Mohinder Kumar allegedly received fraudulent GST ITC of Rs 111 crore in his two firms- VMW Enterprises and Shree Bahadur Steel Company - from several bogus firms and passed on this credit to several other firms without actual supply of goods. Kumar was placed under arrest on February 13, 2021.