Gujarat High Court grants bail to accused in tax claim

Gujarat High Court grants bail to accused in tax claim

The judge ruled on humanitarian grounds and subject to compliance with the conditions

The Gujarat High Court recently upheld the validity of the provisional attachment proceedings initiated by the Goods and Services Tax (GST) department. It granted bail to the accused allegedly involved in fraudulently availing of the Input Tax Credit (ITC).

The applicant is a designated partner and managing director of Utkarsh Ispat LLP. The company deals in purchasing mild steel scrap and converts it into steel billets. The Income Tax department conducted a search and seizure operation at the factory and office premises of Utkarsh and at the residence of the applicant.

It was alleged that the applicant had made several purchase transactions from fictitious entities. The department contended that the immovable property of the applicant had already been attached in excess of the amount of the ITC claim.

However, Justice Gita Gopi held that if that was so, the interest of the IT department was already protected. "The provisions of the GST Act and the Central Goods and Services Tax (GGST) Act provide for compounding of offences," she stated.

The court maintained that no other complaint under the GST or CGST Act had been registered against the applicant. Also, since he was suffering from prostate cancer and undergoing treatment in pursuance of the order of the court early this year, he is being granted bail.

The court further ruled, "The authorities shall release the applicant only if he is not required in connection with any other offence for the time being. If a breach of any condition is committed, the trial court concerned will be free to issue a warrant or take appropriate action in the matter. The bail bond is to be executed before the lower court, which has the jurisdiction to try the case."