Gujarat HC grants bail to accused who falsely availed of ITC benefit to commit tax evasion

Counsel for the accused, Mr. A.A. Zabuawala, stated the applicant is the Managing Director of M/s. Mishkat Agro Industries Pvt. Ltd. and he used brand name of the company to mis-interpret the Department notifications, thereby, making the company and not him as an individual liable under the CGST Act.

Counsel for the respondent-Department, Mr. Ankit Shah, contended that the applicant had registered his trademark, which came out during the inspection at the Trademark Registry and since it was found to be a deliberate act of evasion of tax, the applicant was arrested.

It is also alleged against the applicant that he has wilfully suppressed facts so as to avail the benefit of exemption of zero rate / exempt supplies and has, thereby, evaded huge amount of GST by wrongfully invoking the benefit of Notification No. 2/2017.

A bench comprising of only Justice Gita Gopi allowed the bail application and imposed 5 conditions:

  1. not take undue advantage of liberty or misuse liberty.
  2. not act in a manner injurious to the interest of the prosecution.
  3. surrender the passport, if any, to the lower court within a week.
  4. not leave India without prior permission of the concerned trial court.
  5. furnish the present address of residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of the concerned trial court.

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