Raipur, September 17: The Chhattisgarh High Court on Thursday granted bail to Prakash Bihari Lal Dadhichi, a Director in Dadhichi Iron and Steel Pvt Ltd who was arrested in February by the GST Intelligence for allegedly wrongly availing input tax credit on the basis of fake transactions of sales and supplies.
Justice M M Shrivastava, while granting bail, said, “The records do not show as to what purpose is going to be served to get the applicant in custody any more at this stage when he has remained in custody for about a month before grant of ad-interim bail.”
GST officials alleged that without actual sales and supply of goods, Rs 62 crore was claimed as input tax credit (ITC) by the accused thereby carrying out fraud. They alleged that the company uploaded various invoices and e-way bills on the GST portal to show huge quantity of iron and steel purchased from one supplier and sold to around 25 other purchasers in different parts of the country.
It was alleged by GST officials that when they scrutinised the transactions and carried out physical verifications with regard to the claims, it was found that neither such sales and purchase nor transport of the goods had taken place as claimed by the accused.
Senior advocate Vivek Tankha, appearing for Dadhichi, argued that the GST authorities raided his premises and arrested him without there being any scrutiny, enquiry or any order of assessment against him by competent assessment authorities and without there being any finding that the applicant has wrongly availed input tax credit.
The petition, filed through advocate Ankur Chawla, contended that as per various provisions of the GST Acts and Rules, whenever the authorities are not content with any of the transactions availing credit, submission of returns, information or genuineness of any transaction, they are required to carry out scrutiny under section 61 of the CGST Act to determine correctness of the returns filed.
It further argued that contrary to norms, the GST authorities did not issue notice to Dadhichi seeking explanation for any of the transactions with regard to which the offences have been registered.
The petition said Dadhichi, after his arrest, remained in custody for 30 days and even at the time of his production before the Magistrate, no justification for remand was put forth nor sought for a longer period. When he was in custody, no further interrogation took place which shows that his custodial interrogation was never required.
Even after grant of temporary bail to the accused, there was no allegation that he tried to misuse his liberty, tried to influence prosecution witnesses or did not cooperation in investigation.
The accused is the Director of a reputed trading company and every transaction of the sale, purchase and supply of steel and iron if duly recorded and uploaded on the GST portal which includes sale invoices, e-way bills, etc, the plea said.