Delhi High Court grants anticipatory bail to person facing investigation under CGST Act for tax fraud of Rs 45 crore

The Delhi High Court recently granted anticipatory bail to a person facing an investigation under the Central Goods & Service Tax Act, 2017 for allegedly creating fake firms and claiming fraudulent tax benefit of Rs. 45 crore (Lupita Saluja v. DGGI)..Justice Suresh Kumar Kait granted pre-arrest bail after opining that the custodial interrogation of the accused was not required..The case of the prosecution against the bail applicant, Lupita Saluja, was that she and her husband created five bogus export firms and availed Input Tax Credit of Rs 45 crore on the basis of fake invoices on the e-way bill portal..The prosecution alleged that all their suppliers were either non-existent and none of the transporters conveyed the goods for the companies in question. .During the investigation, the prosecution claimed that while that applicant was drawing an annual salary of Rs.7,20,000, she had received approximately Rs 279 crore from her companies accounts in her personal savings account..The prosecution opposed the grant of bail on the ground that there was incriminating evidence to show that the applicant was not merely a housewife, but was actively involved in the affairs of the companies in question. .It was added that the applicant was not cooperating in the investigation and since the day of the arrest of her husband, she was absconding..The applicant, in response, stated that an amount of Rs 279 crore was credited to her personal account from 2017 to 2020, but the same was further debited to the accounts of the respective companies..It was also asserted that the applicant did not siphon off even a single penny received from the accounts of the company and drew only Rs 3 lakh as annual salary for the Financial Year 2019-2020..The applicant also submitted that the alleged offence under Section 132(b) of CGST Act, 2017 was not made out against her companies as the Input Tax Benefit was availed by following the criteria under Section 16 of the CGST Act, 2017..After considering the submissions made by the parties, the Court noted that the companies' suppliers had valid PAN cards and bank accounts and were granted registration by the CGST authorities after complete verification from their end, in terms of Chapter VI of CGST Act, 2017. .Moreover, the suppliers had been filing requisite GSTR returns and doing all the compliances under the Act, on the basis of which ITC was credited to the account of the applicant's companies, the Court added. .Taking into account the material available on record, the Court opined that it was "wholly misconceived" that the suppliers were non-existent. .The Court also recorded that the the investigating agency had conducted as many as five raids at the residence and office premises of the applicant and seized evidence such as original documents, purchase and sale invoices, ledgers and bank statements, hard disks, CPU, export details, etc..Further noting that the husband of the applicant was granted regular bail and that the applicant was not asked to join the investigation for one year but was called for the first time only after a challenge was raised with respect to the investigation before the High Court, the Court opined, ."I am of the view that custodial interrogation of the applicant is not required.Accordingly, the Arresting Officer is directed that in the event of arrest, the petitioner/applicant shall be released on her furnishing a personal bond in the sum Rs.25,000.".Senior Advocate N Hariharan with Advocates Shadman Ahmed Siddiqui, Sumer Singh Boparai, Siddharth S Yadav, Samarth K Luthra and Abhishek Pati appeared for the applicant..The Directorate General of GST Intelligence was represented by Advocate Harpreet Singh..Read the Order: