No pre-arrest bail to jeweller booked for fraudulently availing ITC of ₹30 crore

The Bombay high court (HC) has rejected the anticipatory bail plea of a city bullion trader booked by the CGST authorities for fraudulently availing input tax credit (ITC) of about ₹30 crore.

The Bombay high court (HC) has rejected the anticipatory bail plea of a city bullion trader booked by the CGST authorities for fraudulently availing input tax credit (ITC) of about ₹30 crore.

The 36-year-old owner of Gajmukhi Bullion had moved high court for pre-arrest bail, apprehending arrest in the case registered by the Commissioner, Central Goods and Services Tax (CGST), for contravention of section 70 of the CGST Act, 2017. (Getty Images/iStockphoto)

“There is sufficient material to deny pre-arrest bail to applicant,” said justice PD Naik, while rejecting the anticipatory bail plea of the bullion trader, Dev Adania.

The 36-year-old owner of Gajmukhi Bullion had moved high court for pre-arrest bail, apprehending arrest in the case registered by the Commissioner, Central Goods and Services Tax (CGST), for contravention of section 70 of the CGST Act, 2017.

On March 25, 2021, CGST authorities had searched his premises in Zaveri Bazaar and at one more place, after the authorities received information that Gajmukhi Bullion had received ITC worth ₹15.22 crore from a non-existent tax payer, M/s. Karnataka Jewellers.

The authorities also claimed that Adania had allegedly also received fraudulent ITC from two more firms, M/s. Kismat Enterprises and M/s. Balaji Enterprises, but no payments were made to these entities.

The jeweller had maintained that when the transactions were entered, the firms were active and no material was placed by the CGST authorities to indicate that parties were non-existent at the relevant time.

HC, however, refused to accept his contention. Justice Naik noted that during the course of investigation statement of one Gautam Joshi was recorded under Section 70 of CGST Act. “He stated that he was ex-employee of the applicant (Adania) and the firms namely M/s. Karnataka Jewellers, M/s. Balaji Enterprises and M/s. Kismat Enterprises were opened by him on the basis of documents arranged from various sources,” said the court while rejecting the plea.