Rejected anticipatory bail application due to severity of allegations and the conduct of the assessee

Last updated: 30 July 2021

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An anticipatory bail application filed by Saurav Gupta, a major shareholder in a company, has been rejected. The court found that the company allegedly issued invoices without supplying goods or services, claiming fake Input Tax Credit (ITC) on bogus invoices from fictitious firms. Gupta's statements indicated a lack of knowledge about the companies he transacted with, suggesting an attempt to evade investigation.

Court :
Patiala House Court

Brief :
In Directorate General of CGST Intelligence (Delhi East Unit) v. Saurav Gupta [Bail Application No. 1423/21 decided on July 28, 2021] Saurav Gupta ('the Respondent”), 90% shareholder of M/s Saurav Beverages Private Limited ('the Company”) filed anticipatory bail application.

Citation :
Bail Application No. 1423/21 decided on July 28, 2021

In Directorate General of CGST Intelligence (Delhi East Unit) v. Saurav Gupta [Bail Application No. 1423/21 decided on July 28, 2021] Saurav Gupta ('the Respondent”), 90% shareholder of M/s Saurav Beverages Private Limited ('the Company”) filed anticipatory bail application.

The Department submitted that during the investigation, from the Respondent's own statements it is revealed that accused company had issued invoices without actual supply of goods or services to pass on fake ITC of GST on bogus invoices to the fictitious, non- existent or non-functional firms/companies without actual movement of goods.

The Hon'ble Patiala House Court noted that the Respondent was in charge of the business affairs of the Company. Further, that the Company has allegedly carried out the business activities with the firms (27 alleged to be fake and fictitious) to the tune of crores of rupees.

Further, noted that as stated by the Respondent, he does not know the owner or the contact person or the contact numbers of the said companies with whom he had transacted or that he is not aware where they are located or that where the goods were supplied. Per-se indicates that the Respondent is trying to evade the purpose of investigation, and is misleading the further investigation of the case by deliberately and intentionally not coming clean on facts of the case.

Furthermore, the entire business appears to have been carried out merely on papers, without their being actual supply of the goods involving sum of Rs. 56 crore approximately. Thus, taking note of the nature of the offence, severity of the allegations and the conduct of the Respondent, rejected anticipatory bail.

FAQ :

The anticipatory bail application was rejected due to the severity of the allegations, which involved a significant GST fraud, and the conduct of the applicant, who appeared to be evading the investigation.

The company allegedly issued invoices without actual supply of goods or services to pass on fake Input Tax Credit (ITC) on bogus invoices from fictitious or non-existent firms, involving transactions worth approximately Rs. 56 crore.

The applicant, Saurav Gupta, was the 90% shareholder and was in charge of the business affairs of the company.

The applicant stated he did not know the owners, contact persons, or locations of the companies he transacted with, nor where the goods were supplied, which the court interpreted as an attempt to evade and mislead the investigation.