Bail Denied in Rs 10.89 Crore GST Fraud Case Involving Fake Invoices

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Case Name

Neeraj Karande v. Union of India

Court Name: High Court of Telangana

Case No.: Criminal Petition No. 5967 of 2020

Judge: Honourable Sri Justice K. Lakshman

Key Takeaways

1. Seriousness of GST Fraud: The court emphasized that GST fraud involving fake invoices without actual supply of goods is a serious economic offence that causes substantial loss to the government exchequer.

2. Non-existent Business Premises: The fact that both the registered office and factory were non-existent since 2016 demonstrated a well-thought-out conspiracy to defraud the government.

3. Ongoing Investigation: Bail was denied primarily because the investigation was still ongoing, including forensic examination of the laptop and tracing the forward chain of recipients who benefited from the fake ITC.

4. Substantial Amount Involved: The fraud involved Rs. 10.89 crores (Rs. 5.46 crores inward irregular ITC and Rs. 5.43 crores outward irregular ITC), which exceeded the Rs. 5 lakh threshold for more serious punishment under Section 132(1)(i) of the CGST Act.

5. Risk of Tampering: Given that the accused was conducting business from a vehicle using electronic devices and the investigation was incomplete, there was a significant risk of evidence tampering.

Issue

Should regular bail be granted to the accused in a case involving alleged GST fraud of Rs. 10.89 crores under Section 132(1)(i) read with Section 132(1)(b)© of the Central Goods and Services Tax Act, 2017, when the investigation is still ongoing?

Facts

The Accused and His Company:

• Neeraj Karande was the Managing Director of M/s. GE Godavari Engineering Industries Limited.
• The company had GST registration number 36AACCG9862H3Z7.

The Alleged Fraud (July 2017 to August 2020):

• Karande allegedly issued GST invoices and e-way bills without actually supplying any goods.
• He procured fake invoices without receiving goods to inflate the company’s annual turnover and enhance banking loan facilities.
• He issued fake GST invoices to various parties to help them show expenses in their accounts.
• He supplied invoices without goods to customers to help them avoid paying GST in cash.

The Non-existent Business:

• The registered office at Plot Nos. 136 and 137, Road No. 3, Phase-2, Maitri Nagar, Miyapur, Hyderabad was found to be non-existent.
• The factory at Survey No. 655, Peddapur Village, Sadashivpet Mandal, Sangareddy District was also non-existent.
• Both premises were not in the company’s possession since 2016.

How He Operated:

• In his statement under Section 70 of the CGST Act dated October 29, 2020, Karande admitted that there was no registered factory premises.
• He was running the business from a Grey Colour Swift Dezire vehicle (TS07 1667) using a laptop and mobile number 9493895762.
• He created invoices on his laptop and raised e-way bills using a mobile hotspot, transferring documents via email (neerajkarande@godavariengg.com).

The Amount Involved:

• Total GST fraud: Rs. 10.89 crores
• Inward irregular ITC credit: Rs. 5.46 crores
• Outward irregular ITC credit: Rs. 5.43 crores

Arrest and Investigation:

• Karande was arrested on November 2, 2020.
• A complaint was filed on November 2, 2020, under F.No.INV/DGGI/HZU/GST/Gr’H’/42/2020-21.
• The investigation was ongoing at the time of the bail hearing.

Arguments

Petitioner’s Arguments (Neeraj Karande):

1. No Loss to Government: Karande’s counsel argued that there was no actual loss to the government exchequer.

2. Beneficial Legislation: GST is beneficial legislation, and Section 138 of the CGST Act provides for compounding of offences.

3. Procedural Violation: Since the offence is cognizable and non-bailable with a punishment of five years, the authorities should have followed the procedure under Section 41-A of the Code of Criminal Procedure, 1973 (Cr.P.C.), which they failed to do.

4. False Implication: The petitioner was falsely implicated, and the alleged ITC credit availment was by a third party, not him.

5. Delay in Filing Complaint: There was an abnormal delay in lodging the complaint. The alleged fraud occurred from July 1, 2017, to August 31, 2020, but the complaint was filed only on November 2, 2020.

6. Company Not Sold Under SARFAESI: Contrary to the authorities’ claim that the company was sold by the bank under the SARFAESI Act, the petitioner produced a sale deed (Document No. 16494 of 2019 dated August 29, 2019) showing that the land and shares were sold by the company itself to M/s. Bajaj Heavy Engineering Limited.

7. No Objection Certificate: The petitioner referred to a letter dated September 11, 2019, from the Assistant Commissioner (ST) Madhapur-III Circle stating no objection to the sale/mortgage of the company’s immovable property.

8. Statement Under Coercion: The statement recorded under Section 70 of the CGST Act was obtained under pressure and coercion, and its contents contradicted the complaint.

9. Investigation Completed: The investigation was almost completed, and the petitioner had been in jail since November 2, 2020, so bail should be granted with conditions.

10. Legal Precedent: The petitioner relied on Prasad Purshottam Mantri v. Union of India [2019(29) G.S.T.L. 647] from the Bombay High Court.

Respondent’s Arguments (Union of India/GST Authorities):

1. Serious Economic Offence: The petitioner committed a serious offence as Managing Director by issuing fake GST invoices and e-way bills without actual supply of goods.

2. Non-existent Premises: The investigation revealed that both the registered office and factory were non-existent, demonstrating a well-thought-out conspiracy to dupe the exchequer.

3. Mens Rea Established: The non-existence of business premises since 2016 clearly established the criminal intent (mens rea) of the management, including the petitioner.

4. Complex Web of Fraud: The petitioner created a complex web of interconnected companies engaged in fraudulent issuance of tax invoices to enable recipient companies to avail fake ITC, causing loss to the government.

5. Substantial Amount: The GST fraud involved Rs. 10.89 crores from July 1, 2018, to August 31, 2020.

6. Admission in Statement: In his statement under Section 70 of the CGST Act, the petitioner admitted running the business from a vehicle using a laptop and mobile phone.

7. Ongoing Investigation: The investigation was not completed, and the forward chain of recipients of the tax credit needed to be investigated.

8. Recovery and Attachment: The department recovered Rs. 42,90,133 from the electronic credit ledger of the company and issued a provisional attachment order under Section 83 of the CGST Act.

9. Forensic Examination Pending: The laptop seized under panchanama dated November 2, 2020, was sent for forensic examination to CFSL, Hyderabad, and the report was awaited.

10. ITC Blocked: Steps were taken to block the ITC credit under Rule 86A(1)(a) of the CGST Act with approval from the Additional Director General, as the ITC was fraudulently availed.

11. Risk of Tampering: There was every possibility of the petitioner interfering with the investigation and tampering with evidence if released on bail.

Key Legal Precedents

The judgment references the following legal provisions and precedent:

Statutory Provisions:

1. Section 132(1)(i) read with Section 132(1)(b)© of the Central Goods and Services Tax Act, 2017 (CGST Act): This section deals with punishment for certain offences. The petitioner was charged under this provision for:

• Section 132(1)(b): Wrongfully availing or utilizing input tax credit
• Section 132(1)©: Availing input tax credit on the basis of invoices/bills issued without supply of actual goods or services
• Section 132(1)(i): When the amount of tax evaded exceeds Rs. 500 lakhs, the punishment is imprisonment for a term which may extend to five years and with fine.

2. Section 70 of the CGST Act: This section deals with the power to summon persons to give evidence and produce documents. The petitioner’s statement was recorded under this provision.

3. Section 138 of the CGST Act: This section deals with compounding of offences. The petitioner’s counsel mentioned this provision arguing that offences under GST can be compounded.

4. Section 41-A of the Code of Criminal Procedure, 1973 (Cr.P.C.): This section deals with the procedure for appearance before a police officer in certain cases. The petitioner argued that this procedure should have been followed.

5. Section 167 of Cr.P.C.: This section deals with the procedure when investigation cannot be completed in twenty-four hours. The remand application was filed under this provision.

6. Section 83 of the CGST Act: This section deals with provisional attachment to protect revenue in certain cases. A provisional attachment order was issued under this provision.

7. Rule 86A(1)(a) of the CGST Act: This rule deals with blocking of input tax credit in certain cases. The authorities blocked the ITC credit under this rule.

8. Section 31 of the CGST Act: This section deals with tax invoice. The issuance of GST invoices and e-way bills without actual supply of material/services was alleged to be in contravention of this provision.

9. Section 16 of the CGST Act: This section deals with eligibility and conditions for taking input tax credit. Availing ITC on the basis of fake GST invoices was alleged to be in violation of this provision.

10. Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act): The respondent authorities alleged that the company was sold by the bank under this Act, which the petitioner disputed.

Case Law Cited:

Prasad Purshottam Mantri v. Union of India [2019(29) G.S.T.L. 647] - This case from the Bombay High Court was cited by the petitioner’s counsel, though the specific principle applied is not detailed in the judgment.

Judgement

The court dismissed the bail application of Neeraj Karande. Here’s the reasoning:

Court’s Analysis:

1. Serious Allegations: The court noted that there were serious allegations against the petitioner involving the collection and issuance of invoices without actual supply of goods, leading to wrongful availment of input tax credit.

2. Modus Operandi: The court acknowledged the modus operandi adopted by the petitioner - issuing GST invoices and e-way bills and passing on ITC to various customers without actual supply of goods.

3. Non-existent Business Premises: The court gave significant weight to the fact that both the registered office and factory were non-existent and not in the company’s possession since 2016.

4. Substantial Amount: The court noted that the GST amount involved was Rs. 10.89 crores (Rs. 5.46 crores inward irregular ITC and Rs. 5.43 crores outward irregular ITC) for the period from July 1, 2017, to August 31, 2020.

5. Admission in Statement: The court considered the petitioner’s admission in his statement under Section 70 of the CGST Act that there was no registered factory premises and that he was running the business from a vehicle using a laptop and mobile phone.

6. Ongoing Investigation: The court emphasized that the investigation was still pending and several aspects needed to be investigated, including:

• The modus operandi adopted by the petitioner
• Forward chain recipients of the tax credit
• Forensic examination of the seized laptop.

7. Recent Arrest: The court noted that the petitioner was arrested only on November 2, 2020, which was relatively recent at the time of the hearing on November 30, 2020.

Final Order:

Based on the above considerations, Justice K. Lakshman held:

“Considering the above and also the offences alleged to have been committed by the petitioner and also the aspect that the petitioner was arrested only on 02.11.2020, this Court is not inclined to grant regular bail to the petitioner.”

The court dismissed the criminal petition and closed all pending miscellaneous petitions.

Date of Judgment: November 30, 2020

FAQs

Q1: What was the main reason for denying bail to Neeraj Karande?

The court denied bail primarily because of the serious nature of the offence involving Rs. 10.89 crores in GST fraud, the ongoing investigation that required further inquiry into the forward chain of recipients and forensic examination of evidence, and the risk that the accused might tamper with evidence or interfere with the investigation. The fact that he was arrested only recently (November 2, 2020) and the business premises were non-existent also weighed against granting bail.

Q2: What exactly did Neeraj Karande do wrong?

Karande, as Managing Director of his company, allegedly issued fake GST invoices and e-way bills without actually supplying any goods. This allowed various parties to wrongfully claim input tax credit (ITC), causing a loss of Rs. 10.89 crores to the government. He also procured fake invoices to inflate his company’s turnover for banking purposes. The most damning fact was that both his registered office and factory were non-existent since 2016, and he was running the entire operation from his car using a laptop.

Q3: What is input tax credit (ITC) and why is fake ITC a serious offence?

Input Tax Credit is a mechanism under GST where businesses can claim credit for the tax they paid on purchases (inputs) against the tax they collect on sales (outputs). This prevents double taxation. Fake ITC fraud occurs when businesses claim credit based on fake invoices for goods or services they never actually received. This directly reduces government tax revenue and is considered a serious economic offence.

Q4: Why did the petitioner argue that Section 41-A of Cr.P.C. should have been followed?

Section 41-A of Cr.P.C. provides that for certain offences, instead of immediately arresting a person, the police should issue a notice requiring them to appear before the investigating officer. The petitioner argued that since the offence was cognizable and non-bailable with a punishment of five years, this procedure should have been followed before arrest. However, the court did not find this argument persuasive enough to grant bail.

Q5: What is the significance of the business being run from a vehicle?

The fact that Karande admitted to running the business from a vehicle (Grey Swift Dezire TS07 1667) using just a laptop and mobile phone, rather than from a registered office or factory, demonstrated that this was not a legitimate business operation. It showed a deliberate attempt to avoid detection and established the fraudulent nature of the enterprise. It also made it easier for him to potentially destroy evidence or flee.

Q6: What happens to the Rs. 42,90,133 that was recovered?

The department recovered Rs. 42,90,133 from the electronic credit ledger of the petitioner’s company. Additionally, a provisional attachment order was issued under Section 83 of the CGST Act to the company’s banker to prevent further dissipation of funds. This amount would likely be adjusted against the total tax liability once the investigation is complete.

Q7: Can the offence under Section 132 of CGST Act be compounded?

Yes, Section 138 of the CGST Act provides for compounding of offences. The petitioner’s counsel mentioned this provision, suggesting that the offence could potentially be settled through compounding. However, the court did not discuss this aspect in detail, and it did not influence the bail decision. Compounding typically requires payment of the tax dues and penalties and is subject to certain conditions.

Q8: What is the role of forensic examination in this case?

The laptop seized from the petitioner under panchanama dated November 2, 2020, was sent for forensic examination to the Central Forensic Science Laboratory (CFSL), Hyderabad. This examination is crucial because the petitioner admitted to creating invoices and e-way bills on his laptop. The forensic report would provide digital evidence of the fraudulent transactions, the extent of the fraud, and potentially identify other parties involved in the scheme. The fact that this report was still awaited was one reason for denying bail.

Q9: What is Rule 86A of the CGST Act and why was it invoked?

Rule 86A(1)(a) of the CGST Act allows the tax authorities to block the input tax credit in the electronic credit ledger of a taxpayer if they have reasons to believe that the ITC has been fraudulently availed or is ineligible. In this case, the Additional Director General approved blocking the ITC because: (1) the petitioner availed credit on fake invoices obtained without supply of goods, and (2) the company was not conducting business from its registered place. This prevents further misuse of the fraudulent credit.

Q10: What are the next steps in this case?

Following the dismissal of the bail application, Neeraj Karande would remain in judicial custody while the investigation continues. The authorities would:

• Complete the forensic examination of the laptop
• Investigate the forward chain of recipients who benefited from the fake ITC
• Gather additional evidence
• File a chargesheet once the investigation is complete.

1. This is an application for regular bail. The petitioner viz.,

Neeraj Karande is sole accused in F.No.INV/DGGI/HZU/GST/Gr’H’/

42/2020-21 dated 02.11.2020. The offence alleged against the

petitioner is under Section 132(1)(i) read with Section 132(1)(b)(c) of

the Central Goods and Services Tax Act, 2017 (for short ‘CGST

Act’).

2. Heard Sri T. Bala Mohan Reddy, learned counsel for the

petitioner, and Sri P. Dharmesh, learned standing counsel for the

respondent. Perused the record.

3. The allegation against the petitioner is that he is managing

director of M/s. GE Godavari Engineering Industries Limited

(hereinafter referred to as ‘Company’). The petitioner has obtained

registration under the provisions of the CGST Act vide GSTIN

No.36AACCG9862H3Z7. Being the managing director of the

company, the petitioner has collected and issued invoice or bill

without supply of goods in violation of the provisions of the CGST

Act or the rules made thereunder leading to wrongful availment or

utilization of input tax credit rendered by him. The modus operandi

adopted by the petitioner is that he indulged in issuing GST invoices,

e-way bills and passing on input tax credit to various customers

without actual supply of goods. It is further alleged in the complaint

that the petitioner, as per the business need of the Company, procured

invoices without actual receipt of goods and supplied the said invoices

and subsequently increased the Company’s annual turnover to

enhance his banking loan facilities. He has also issued GST invoices

without supply of goods to various other parties and helped them to

show them as their expenses in their accounts. It is further alleged

against the petitioner that he has supplied invoices without supply of

goods to some of his customers to avoid payment of the GST in cash.

He has procured GST invoices without supply / receipt of materials

from the firms mentioned in the statements given by him on

29.10.2020 and 02.11.2020 through M/s. Advance PowerInfra Tech

Limited, M/s. Radhika Electrocast Private Limited, Bahrat Gupta,

Pratik Chaturvedi, Janki Lal Sureka and Siddarth Sharma at his

request to his Company located in Hyderabad. Thus, issuance of GST

invoices, e-way bills without actual supply of material / services is in

contravention of the provisions of Section 31 of the CGST Act.

Further, availing input tax credit of GST on the basis of fake GST

invoices issued without supply of material is in violation of Section 16

of the CGST Act.

4. Thus, the petitioner has wrongfully availed or utilized input

tax credit and also availed input tax credit on the basis of the invoices

/ bills issued without supply of actual goods or services and the same

an offence under Clause (b) and (c) of Sub-Section (1) of Section 132 of the CGST Act which is punishable under Section 132(1)(i) of the

CGST Act.

5. It is also alleged that the GST amount involved for the

operations carried out by the petitioner from 01.07.2017 to 31.08.2020

is Rs.10.89 crores (Rs.5.46 Crores inward irregular ITC credit plus

5.43 crores outward irregular ITC credit), which is much higher than

Rs.500.00 lakhs, is an offence punishable under Section 132(1)(i) of

the CGST Act. The said fact of petitioner working is explained by

him in his statements dated 29.10.2020 recorded under Section 70 of

the CGST Act.

6. Learned counsel for the petitioner would submit that there is

no loss to the Government exchequer. The GST is a beneficial

legislation. Section 138 of the CGST Act deals with compounding of

offences. The punishment is five (5) years. It is a cognizable offence

and non-bailable. Therefore, the respondent authorities have to

necessarily follow the procedure under Section 41-A of the Code of

Criminal Procedure, 1973 (for short ‘Cr.P.C.’). In the present case,

the respondent authorities have not followed the same.

7. The learned counsel for the petitioner would further submit

that the respondent authorities have falsely implicated the petitioner in

the present crime. He would further submit that even as per the

complaint, the alleged availment of ITC credit is by a third party and

that there is abnormal delay in lodging the complaint. As per the complaint, the alleged availment of ITC credit by the Company is

from 01.07.2017 to 31.08.2020 and the complaint was lodged on

02.11.2020. Thus, there is abnormal delay in lodging the complaint.

8. Learned counsel for the petitioner would further submit that

the respondent authorities are alleging that the Company was closed

and it was sold by the bank by invoking the procedure laid under the

Securitization and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI

Act’). But, according to him, the Company was not sold. He has filed

copy of the sale deed bearing document No.16494 of 2019 dated

29.08.2019 executed by the Company in favour of M/s. Bajaj Heavy

Engineering Limited. Referring the said document, learned counsel

for the petitioner would submit that the land and shares of the said

Company were sold under the above sale deed and not by the bank

under the provisions of the SARFAESI Act as alleged by the

respondent authorities.

9. Learned counsel for the petitioner by referring to the letter

dated 11.09.2019 issued by the Assistant Commissioner (ST)

Madhapur-III Circle, Hyderabad Rural Division to the Sub Registrar

(SRO), Sadasivpet Mandal,Sanga Reddy District, Telangana, would

submit that the respondent authorities have no objection to sale /

mortgage immovable property of the Company as mentioned in its

earlier letter dated 31.01.2019.

10. Learned counsel for the petitioner has relied on the

principle laid down by the High Court of Bombay in Prasad

Purshottam Mantri v. Union of India He has also referred to the

statement recorded by the respondent authorities under Section 70 of

the CGST Act and would submit that under pressure and coercion, the

said statement was recorded. Even as per the statement of the

petitioner, the same is contrary to the contents of the complaint.

Learned counsel for the petitioner would submit that the respondent

authorities have arrested the petitioner on 02.11.2020 and since then

he is in jail. The investigation is almost completed. Therefore, the

petitioner’s bail application may be considered by imposing any

conditions.

11. On the other hand, the learned standing counsel for the

respondent would submit that the petitioner herein being the managing

director of the Company has committed serious offence. The modus

operandi adopted by the petitioner is that he indulged in issuing GST

invoices, e-way bills and passing on input tax credit to various

customers without actual supply of goods. He has referred to the

contents of remand application filed under Section 167 of Cr.P.C.

In the said remand application, it is specifically mentioned that the

investigation revealed that the registered office of the Company is

found to be non-existent which is said to be located at Plot Nos.136

and 137, Road No.3, Phase-2, Maitri Nagar, Miyapur, Hyderabad.

The factory of the Company said to be located at Survey No.655,

Peddapur Village, Sadashivpet Manal, Sangareddy District, is also

non-existent.

12. Learned standing counsel for the respondent would further

submit that since both the premises are found to be not in possession

of the said entity since 2016, there is no established premises of the

Company. The mens rea of the management of the Company

including the petitioner, managing director of the Company, can be

clearly viewed which establishes the well though out conspiracy

aimed at duping the exchequer by way of creation of a complex web

of inter-connected companies engaged in fraudulent issuance of tax

invoices without supply of goods or services to enable the recipient

companies to avail and utilize fake input tax credit leading to loss to

the Government exchequer.

13. He would further submit that the GST amount involved for

the operations carried out by the petitioner for the period from

01.7.2018 to 31.08.2020 is 10.89 crores.

14. Learned standing counsel would further submit that the

respondent authorities have already recorded the statement of the

petitioner under Section 70 of the CGST Act, wherein the petitioner

has categorically answered to Question No.9 of the said statement

stating that presently, there is no registered premises of the factory.

Business is being run by him from vehicle viz., Grey Colour Swift

Dezire TS07 1667 using laptop and mobile No.9493895762. He has

also answered to Question No.10 stating that based on the invoices

created in the laptop, he raised documents like e-way bills using

hotspot and transfer documents created through mail

neerajkarande@godavariengg.com. He also answered that he will

submit all the related documents like invoices, e-way bill after

retrieval of the same from his mail, as far as possible.

15. The learned sanding counsel has also referred to paragraph

No.6 of its counter affidavit, wherein it is stated that the investigation

is not completed and forward chain recipient of the tax credit is to be

investigated. Due to ongoing investigation, the department could lay

its hand on an amount of R.42,90,133/- in the electronic credit ledger

of the Company of the petitioner. He caused loss of to a tune of

Rs.10.89 lakhs to the exchequer of the Government. There is every

possibility of the petitioner interfering with the investigation and

tampering with the evidence. With the said submissions, the learned

standing counsel for the respondent authorities seeks dismissal of the

present application.

16. In view of the above rival submissions, the allegations

against the petitioner are that he has collected and issued invoices or

bills without actual supply of goods in violation of the provisions of

the CGST Act and the rules made thereunder leading to wrongful

availment or utilization of input tax credit rendered by him and his

Company. The modus operandi adopted by the petitioner is that he

indulged in issuing GST invoices and e-way bills and passing on input

tax credit to various customers without actual supply of goods. It is

also specifically mentioned in the remand application that the

registered office and also the factory of the petitioner are non-existent

one. According to the respondent authorities, the bank has sold the

unit of the Company by invoking the procedure laid down under

SARFAESI Act. Both the registered office and the factory are found

to be not in possession of the Company since 2016. The petitioner has

filed irregular inward ITC credit of Rs.5.46 crores and outward

irregular ITC credit of Rs.5.43 crores from 01.07.2017 to 31.08.2020.

In the statement recorded under Section 70 of the CGST Act, the

petitioner has admitted that presently there is no registered premises of

the factory. The business is being run by him from the vehicle viz.,

Grey Colour Swift Dezire TS07 1667. He is also conducting business

by using his laptop and mobile No.9493895762. He has answered that

based on the invoices created in the laptop, he has raised documents

like e-way bills using hotspot and transfer documents created through

e-mail neerajkarande@godavariengg.com. He also answered that he

will submit all the related documents like invoices, e-way bill after

retrieval from his mail, as far as possible.

17. In the counter affidavit, the respondent authorities

specifically contended that the investigation is not yet completed.

The forward chain recipient of the tax credit is to be investigated.

Due to ongoing investigation, the department could lay its hand on an

amount of Rs.42,90,133/- in the electronic credit ledger of the

Company of the petitioner. Further, a provisional attachment order

under Section 83 of CGST Act was issued to the banker of the

Company. Steps have been undertaken to get the laptop recovered

under panchanama dated 02.11.2020 to be forensically examined by

CFSL, Hyderabad. Such forensic science laboratory report is awaited.

Steps have been taken to prevent further loss to the Government

exchequer by blocking the ITC credit under Rule 86A(1)(a) of the

CGST Act as the competent authority i.e., the Additional Director

General has accorded approval along with reasons to believe that the

ITC has been fraudulently availed and is ineligible due to two counts

i.e. the petitioner has availed credit on fake invoices obtained without

supply of goods and Company of the petitioner not conducting

business from its registered place.

18. Thus, there are serious allegations against the petitioner.

There are several aspects to be investigated into by the investigating

officer during the course of investigation. The modus operandi said to

have been adopted by the petitioner in commission of offence is to be

investigated into by the investigating officer. The GST amount

involved for the operations carried out by him for the period from

01.7.2017 to 31.08.2020 is Rs.10.89 crores. Admittedly, the

investigation is pending.

19. Considering the above and also the offences alleged to have

been committed by the petitioner and also the aspect that the petitioner

was arrested only on 02.11.2020, this Court is not inclined to grant

regular bail to the petitioner.

20. Therefore, the criminal petition is dismissed.

As a sequel thereto, miscellaneous petitions, if any, pending in

the criminal petition stand closed.

K. LAKSHMAN, J

November 30th, 2020.