Hyderabad: A two-judge bench of the Telangana High court, comprising Justice V Ramasubramanian and Justice P Keshav Rao, on Thursday dismissed a batch of about ten writ petitions challenging the summons issued by the Superintendent (Anti Evasion) of Hyderabad GST Commissionerate.

The Superintendent had summoned directors of a few companies, a Chief Financial Officer and a partner of a partnership firm.

The authorities contended that a group of persons, including the petitioners, floated several proprietary concerns/partnership firms/ limited companies which in turn claimed input tax credit (ITC) without producing actual physical receipt of goods. They issued such invoices from July 2017. The premises of some of these entities were used to do circular trading/bill trading worth over hundreds of crores of rupees. The present writ petitions were in the nature of anticipatory bail.

In a 43-page order, the bench, dealing with the pleas of what are alleged to be shell companies of a leader belonging to the TDP, pointed out to certain incongruities in the legislation “The moment the Commissioner has reasons to believe that a person has committed a cognisable and non-bailable offence warranting his arrest, then we think that the safeguards before arresting a person, as provided in Sections 41 and 41A of CrPC, may have to be kept in mind,” it said.

The bench also examined whether prima facie the nature of the allegations and the circumstances entitled the petitioners to protection against arrest. “The main allegation of the Department against the petitioners is that they are guilty of circular trading by claiming input tax credit on materials never purchased and passing on such input tax credit to companies to whom they never sold any goods. The Department has estimated that fake GST invoices of about Rs 1,289 crore were issued and the benefit of wrongful ITC passed on by the petitioners is to the tune of Rs 225 crore,” it said. “The argument that there cannot be an arrest even before adjudication or assessment, does not appeal to us,” Justice Ramasubramanian said. The bench further added: “Therefore, all the technical objections raised by the petitioners are liable to rejected.”

Published On : 20-04-2019

Source : Telangana Today