Paresh Nathalal Chauhan v. State of Gujarat
[Citation -2020-LL-0505-12]

Citation 2020-LL-0505-12
Appellant Name Paresh Nathalal Chauhan
Respondent Name State of Gujarat
Relevant Act CGST
Date of Order 05/05/2020
Judgment View Judgment
Keyword Tags deduction of commission • incriminating material • deposit of money • investigation • tax credit

R/CR.MA/6237/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/CRIMINAL MISC.APPLICATION NO. 6237 of 2020 PARESH NATHALAL CHAUHAN Versus STATE OF GUJARAT Appearance: MR NIRUPAM NANAVATI SENIOR COUNSEL WITH MR CHETAN K PANDYA(1973) for Applicant(s) No. 1 DS AFF.NOT FILED (R)(71) for Respondent(s) No. 2 MR MITESH AMIN PUBLIC PROSECUTOR(2) for Respondent(s) No. 1 CORAM:HONOURABLE MR.JUSTICE G.R.UDHWANI Date : 05/05/2020 ORAL ORDER 1. This application is filed seeking bail under Section 439 of Code of Criminal Procedure, 1973 ( for short Cr.P.C ) in respect of offence punishable under Section132(1)(b)(c) of Central Goods and Services Tax Act, 2017 for which complaint being File No. CCST/DCST/ENF-CO/AC-1/Paresh Chauhan Case/ 2019-20 / B-42 came to be registered with office of Chief Commissioner of State Tax, Gujarat State, Ahmedabad. 2. petitioner has been arrested for offence punishable under section 132 of Central Goods and Services Tax Act, 2017. principal allegation against petitioner is of his having obtained tax credit to extent of about Rs. 60 Crores through fictitious firms allegedly established by him in connivance with other persons who of course at moment are not arraigned as accused. maximum punishment for offence is five years imprisonment. 3. quantum of sentence, recording of statements of as many as 35 beneficiaries of transactions, recovery of Rs. 14 Crores from them, quantum of amount involved, non- arrest of persons allegedly conniving with petitioner in commission of offence as also heart ailment of petitioner i.e. insertion of two Page 1 of 4 Downloaded on : Sat May 08 12:54:25 IST 2021 R/CR.MA/6237/2020 ORDER stents in his heart are pressed into service as grounds for admitting petitioner to bail. It is also submitted that contention of learned prosecutor that investigation is in progress shows filing of halfhearted complaint against petitioner in defiance of Section 167 of Cr.P.C inasmuch as only purpose of such hasty complaint appears to be depriving petitioner of benefit of default bail under section 167 of Cr.P.C. According to learned counsel for petitioner this is fraud on statute. It was also argued that no assessment notice has been issued to petitioner and thus prosecution has no case to prove against petitioner. Reliance has been placed upon Sanjay Chandra vs. Central Bureau of Investigation (2012) 1 SCC 40. 4. Per contra, learned Public Prosecutor would oppose this application with submission that this court may not exercise discretion in case where well- designed offence after pre-meditation by bringing up as many as 35 fictitious firms for claiming tax credit on goods not sold has been prima facie committed. It was contended that fake and bogus invoices were raised in said 35 firms to cheat public exchequer; that goods never passed to such firms but turn over @ Rs. 350 Crores was artificially shown. It was contended that such invoices were raised by Traders to take benefit of tax credit. It was contended that several firms have been benefited out of such fake transaction and Rs. 14 Crores so far have been recovered from some of firms. It was contended that although complaint is filed against petitioner in compliance with Section 167 of Cr.P.C, case requires more investigation to unearth racket involving innumerable firms. It was contended that nephew of petitioner who raised fake invoices in several firms is still at large. It is contended that evidence also shows deposit of money in account of one Harish, in sum of Rs. 25 to 30 crores wherefrom after deduction of commission remaining amount is transmitted to bank account wherefrom it was deposited earlier. It was argued that while quantum of punishment prescribed can be one of considerations for bail but not solitary consideration and in cases concerning economic crime of as high magnitude as Rs. 60 Crores, causing loss to public exchequer and where case is at large with further investigation wherein summons have been issued to as many as 406 firms, discretion may not be exercised. It was Page 2 of 4 Downloaded on : Sat May 08 12:54:25 IST 2021 R/CR.MA/6237/2020 ORDER contended that individual liberty must give way to public interest and when public exchequer is at stake, case would assume seriousness irrespective of quantum of sentence prescribed. It was contended that incriminating material like laptop, rubber stamp, pre-signed cheque books of several firms and unsigned cheque books of several firms used in offence have been recovered from possession of petitioner. It was also contended that this is not case of avoidance of tax/assessment of tax but racket to unlawful tax credit. 5. This court has considered rival submissions as also taken into consideration case of Sanjay Chandra (supra). From facts of Sanjay Chandra(supra), it has been noticed that accused was on bail all throughout trial and was released by judgement of High Court with no allegation of abusing trust, etc. accused was also on bail with no complaints against him of tampering with evidence. accused there were facing trial under Sections 420- B, 468, 471 and 109 of Indian Penal Code and Section 13(2) read with 13(i)(d) of Prevention of Corruption Act, 1988. 6. In instant case, it appears that case would require thorough investigation with possibility of addition of more accused to array; inasmuch as, as many as 406 summonses have been issued and 92 beneficiary firms are under scrutiny. Complaint might have been filed against petitioner in compliance with Section 167 of Cr.P.C, that would however not preclude investigating agency to investigate into what could be huge racket and under such circumstances placing petitioner out of jail would be potential threat to investigation; inasmuch as, manipulation of evidence at hands of petitioner cannot be ruled out. loss of Rs. 60 Crores to public exchequer so far cannot be considered as small amount. It appears that it is only owing to timely detection of crime that loss so far is Rs. 60 Crores; it would have been much-much more in absence of detection of crime. It is not as if petitioner stopped at Rs. 60 Crores; in all probability he would have continued racket in absence of its detection. Therefore, what is relevant is not quantum, but well-designed pre-meditated plan floated by petitioner to loot public exchequer. Page 3 of 4 Downloaded on : Sat May 08 12:54:25 IST 2021 R/CR.MA/6237/2020 ORDER 7. It may be true that as on date person conniving with petitioner might not have been arraigned as accused or arrested; but then it would be pre-mature to make any further comment on said aspect as investigation is under way and it is at crucial stage. 8. Last but not least; there is nothing to indicate serious ill-health of petitioner; needless however to say that in case of necessity, necessary medical help would be provided to petitioner. 9. For foregoing reasons, application fails and is dismissed. Rule is discharged. (G.R.UDHWANI, J) KAUSHIK D. CHAUHAN / NIRU Page 4 of 4 Downloaded on : Sat May 08 12:54:25 IST 2021 Paresh Nathalal Chauhan v. State of Gujarat
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