GST: Jharkhand High Court Rejects Anticipatory Bail In Rs.29.11 Lakh Fake ITC Fraud Case

The High Court of Jharkhand on 11 May refused to grant anticipatory bail to an accused allegedly involved in wrongful availment of Input Tax Credit (ITC) through fake business entities under the GST regime. A Bench of Justice Sanjay Kumar Dwivedi dismissed the anticipatory bail application filed by Dilip Kumar Ramgopal Tibrewal in connection with offences under the IPC and the Jharkhand Goods and Services Tax (JGST) Act. The court mentioned that

“The supplementary case diary specifically identifies the petitioner as the proprietor operating the firms through which wrongful ITC was allegedly availed and misappropriated.”

The case arose out of Telco PS Case No. 104 of 2018 registered under Sections 406, 420, 468, 471 and 120B of the Indian Penal Code, read with Sections 132(1)(b), 132(1)(e) and 132(1)(i) of the JGST Act.

According to the prosecution, investigation revealed that the petitioner was operating M/s August Overseas Private Limited and M/s Shagun Enterprises and had allegedly used the entities for generating and utilizing fake invoices to fraudulently claim Input Tax Credit amounting to Rs.29.11 lakh.

The petitioner sought protection from arrest and argued that he had been falsely implicated in the matter. It was contended that he was merely a bona fide purchaser who procured goods from suppliers having valid GST registrations and therefore had no reason to suspect any illegality in the transactions.

The petitioner also sought parity with co-accused Renu Singh, who had earlier been granted anticipatory bail by the High Court in a separate proceeding.

However, the High Court declined to accept the submissions and noted that paragraph 206 of the supplementary case diary specifically recorded the petitioner’s role as proprietor of the firms allegedly involved in the fraudulent transactions.

“The case of the co-accused stands on a different footing as one of the FIRs against her had already been quashed and the assessment proceedings were under challenge before the Court.”

The Court observed that the parity argument could not be accepted since the factual background and legal position relating to the co-accused were entirely distinguishable from the petitioner’s case.

While refusing anticipatory bail, the Court also took note of the seriousness of economic offences involving fraudulent extraction of tax credit from the government exchequer. It held that the nature of allegations and materials collected during investigation did not justify granting pre-arrest protection.

Thus, the anticipatory bail application filed by the petitioner was dismissed.

To Read Full Judgment, Download PDF Given Below