February 13, 2019:

On Tuesday, Madras High Court on refused to grant anticipatory bail to nine people who were accused of GST fraud.

Noting that Goods and Services Act (GST) was enacted with the laudable object of ‘one nation, one tax’, and that the department should be provided with complete independence to achieve the object,

Justice N Anand Venkatesh said, "Wherever the department finds that certain provisions in the act are misused — by creating fake invoices and availing input tax credit without any movement of goods — the same has to be curbed and nipped in the bud to ensure that it does not grow into another big scam, with direct impact on the economy of this nation."

In the considered view of this court, in matters of this nature, the department must be given complete independence to investigate the cases since it is of national interest.

This Court shouldn't tie the hands of the department in proceeding further with the investigation, by entertaining an anticipatory bail petition and imposing certain conditions, since what has been unearthed till now is only the tip of an iceberg and there is a long way to go to find out how long these fake invoices have been in use, the Judge added.

The Court made the observation on the petitions moved by Vimal Nayan and 8 others who apprehended arrest in connection with an alleged GST Fraud Case.

The prosecution stated that various organized companies/persons registered with the GSTN portal have involved themselves in issuing fake invoices without the actual supply of goods/services and also received fake invoices without receipt of goods and availed input tax credit to cheat the exchequer.

Denying the charges, the petitioners appealed that the act is a recent enactment with various unresolved issues and the department is proceeding further to prosecute the petitioners on mere assumptions.

Refusing to concur with the submission, the Judge said, “If the petitioners are conducting genuine business, they can easily prove the actual movement of goods during the investigation, which will be borne in the documents. If the department is satisfied regarding the same, the department will exclude the companies belonging to the petitioners and proceed further with the investigation.

The Court then dismissed all nine bail applications moved by the petitioners.

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