Heard learned Counsel for the parties.
2. Apprehending arrest in Crime No. 0178 of 2021 registered with APMC Police Station, Navi Mumbai for the offences punishable under Section 420, 406 and 34 of the I.P.C, Applicant seeks pre-arrest bail.
3. On 10th August, 2021, this Court declined the pre-arrest bail to the Applicant. Whereafter, Applicant moved this application in the changed circumstances and in support of the application, relied on a letter dated 13th August, 2021 addressed by the Deputy Commissioner, GST, Belapur.
4. Thus upon perusing the letter dated 13th August, 2021, which offers and clarifies first letter dated 28th July, 2021, the State was directed, not to take any coercive steps against the Applicant.
Back ground facts:-
5 Briefly stated, the prosecution case is that Mahendra R. Parmar (Complainant) is owner of M/s. Esjaypee Mercantile Global Pvt. Ltd., This company does the trading in dry-fruits and spices on, wholesale basis in Agricultural Produce Market Committee. One Sarfaraz Jaliyawala (co-accused), broker in Agricultural Produce was known to the informant – Mahendra M. Parmar. In March, 2020, co-accused Sarfaraz introduced Mahendra to the Applicant and informed him that Applicant requires large quantity of cloves. Applicant is also a trader in spices under the name and style of M/s. Bansal Traders. Complainant agreed to supply cloves to the Applicant. At the relevant time, Complainant’s goods (cloves) were stocked at All India Storage and Warehousing situated at Navi Mumbai. Complainant sent an e-mail to Cold Storage and Warehousing on 2nd March,2020 and asked Warehouse Manager to transfer 100 bags of cloves worth ₹ 22,90,842/- to Applicant’s firm. Yet by another e-mail dated 3rd March,2020 Warehousing Manager was asked to transfer 200 bags of cloves worth ₹ 51,30,777/- to Applicant’s firm. After which, Cold Storage and Warehousing Services Provider transferred 300 bags of cloves in the Applicant’s firm- namely M/s. Bansal Traders. On 4th March, 2020, 150 bags of cloves were delivered at the godown No. G-39 of Sarfaraz (coaccused)at Spice Market Premises. Second lot of 150 bags of cloves were delivered on 5th March, 2020 to Sarfaraz at his godown.
6. After which Complainant drew and raised the Invoice Nos. 106 and 107 on the Complainant. He filed GST return Form. GSTR-1 disclosing the sales to the Applicant. Obviously, corresponding sale details were captured in GSTR-2B and GSTR 2A of recipient (applicant). GSTR 3B is summary return and, therefore, the amount of ITC available must match with tax details disclosed in Form GSTR-2B regularly along with GSTR 2A. Complainant case is that though he had delivered the goods to Sarfaraz at the instance of the Applicant, he did not receive the payment. Therefore, he issued a notice to the Applicant and co-accused Sarfaraz. Applicant replied the notice and denied receipt of goods. After which, on a complaint, the crime in question was registered on 8th May, 2021 against the Applicant and Sarfaraz for cheating. When first bail application was heard, this Court to ascertain the allegation of delivery of cloves, verified the statement of warehouse keeper – Mishra; Driver of truck who had delivered the clove bags. Thus statement of Mishra, Drivers and document reflecting transfer of clove bags from Lot No. 1333 in the name of M/s. Bansal Traders has, prima facie, established the fact that 300 clove bags were delivered to Sarfaraz at the instance of the Applicant. Further, to ascertain whether goods were delivered to Sarfaraz at the instance of the Applicant, prosecution would rely on a letter received from the Joint Commissioner (Anti Evasion) CGST and Central Excise, Belapur. Paragraph 2 of the letter reads as under:-
“Also M/s. Bansal Traders having GSTIN – 27AAPB9332QIZB registered under CGST & C.Ex. Mumbai East Commissionrate and falling in our jurisdiction, it is observed that the tax payer has availed the Input Tax Credit (ITC) of CGST of ₹ 1,76,705.2/- and SGST of ₹ 1,76,705.2/- against the Invoices no. EMGPL/MH/19/106 dated 02.03.2020 and EMGPL/MH/19/107 dated 03.03.2020 issued by M/s. Esjaypee Mercantile Global Pvt. Ltd., A photo copy of the GSTR 2A enclosed of the said tax payer is enclosed herewith. As regards outward supplies made by M/s. Bansal Traders, please find enclosed herewith a copy of the Form GSTR – I returns filed by the said tax payer during the period from March 2020 to June 2020 as it is not possible to ascertain at our end to which customer the impugned goods have been supplied.
It may please be noted that consequent to filing of GSTR-1 return by M/s. Esjaypee Mercantile Global Pvt. Ltd., giving details of the outward supplies made by them, the outward supply details get captured and auto-populated in GSTR 2A returns of M/s. M. A. Agro and M/s. Bansal Traders.”
Relying on the statement of Mishra, Drivers and letter from CGST, this Court had denied pre-arrest bail to the Applicant since offence of cheating was, prima facie, made out against the Applicant.
7. Application in hand (2nd bail application) was moved on the ground that the Applicant had not claimed Input Tax Credit and a letter dated 1st September, 2020 issued by the office of Commissioner (GST) was issued mistakenly. Applicant, therefore, largely relied on letter dated 13th August, 2021 which, according to him, offers clarification or clarifies first letter dated 1st September, 2020. To appreciate the Applicant’s contention, let me reproduce contents of 2nd letter dated 13th August, 2021:-
“In this regard, on going through the Purchase Register of M/s. Bansal Traders (GSTIN: 27AAAPB9332QIZG) for the period from March 2020 to October 2020 giving invoice-wise details of the supplies on which Input Tax Credit (ITC) has been availed by them, prima facie it is observed that the said Purchase Register for the afore said period does not cover the details of invoices viz. EMGPL/MH/19/106 dated 02.03.2020 & EMGPL/MH/19/107 dated 03.03.2020 raised by M/s. Esjaypee Mercantile Global Pvt. Ltd.,. Further, M/s. Bansal Traders has submitted a ITC Reconciliation statement for the month of March 2020 and on going through the said statement, it prima facie appears that though the ITC involved against the invoices raised by M/s. Esjaypee Mercantile Global Pvt. Ltd., is being reflected in their GSTR-2A for the month of March 2020 but M/s. Bansal Tradershas not availed the ITC against these invoices during the period from March 2020 to October 2020, as evident from the GSTR-3B returns filed for the period from March 2020 to October 2020, GSTR-9 Annual Return for the FY 2019-20 filed on 05/02/2021 and Certificate dated 05/02/2021 issued by their Chartered Accountant. The earlier report of even no. dated 08/09/2020 addressed to Sr. Police Inspector, APMC, Vashi in respect of M/s. Bansal Traders may be treated as inconclusive since M/s. Bansal Traders had failed to produce documentary evidence to substantiate their claim with regard to non-availment of ITC on the afore said invoices and since these invoices were reflected in their GSTR-2A the report was prepared based on that.”
8. Mr. Kadam, therefore, argues that Applicant had neither claimed Input Tax Credit nor there is other material on record to even suggest that 300 clove bags were delivered to Sarfaraz at the instance of Applicant. Mr. Kadam argued that godown of Sarfaraz is situated within the limits of Market Committee but corresponding details of entry of trucks in the market yard on the alleged date of deliver of cloves were not found. Mr. Kadam y relied on extract produced by Market Committee to contend that two trucks had not entered in the Market Yard on the alleged date of delivery of cloves to Sarfaraz. Mr. Kadam argues that CGST Authority has certified that Applicant has not claimed Input Tax Credit against Invoice Nos. 106 and 107 and, therefore, it is contended that Applicant has been implicated in the false case. It is argued that Applicant is reputed businessman and his presence for the Investigation can be secure by imposing suitable conditions. Mr. Kadam, therefore, seeks pre-arest bail on these grounds.
9. Learned Counsel for the Complainant and learned Prosecutor for the State contended that besides, the letters dated 13th August, 2021 received from the office of the CGST, there is sufficient material on record to believe 300 bags of cloves were delivered to Sarfaraz at the instance of the Applicant. Learned Prosecutor, on instructions, submitted that co-accused Sarfaraz was denied pre-arrest bail by this Court and even by the Apex Court. He sumitted that in the course of investigation, Sarfaraz had produced two delivery challans, admitting delivery of clove bags by the Complainant. These two challans bears signature of Sarfaraz. I have no reason to disbelieve these two challans. It shows that Complainant had delivered cloves to the Sarfaraz and, thereafter, raised invoices bearing Nos.106 and 107 and filed GSTR-1.
10. Now the next question is whether goods delivered to Sarfaraz, were at the instance of Applicant ? To answer this point, let me read the letter dated 1st September, 2020 (which I have reproduced above). By this letter, GST Authority has certified that Applicant – M/s. Bansal Traders had availed Input Tax Credit of CGST of ₹ 1,76,705/- and SGST of ₹ 1,76,705/- against Invoice Nos. 106 and 107 dated 2nd March, 2020 and 5th March, 2020 respectively issued by M/s. Esjaypee Mercantile Global Pvt. Ltd., (Complainant). However, it is surprising that in the subsequent communication dated 13th August, 2021, the GST Authority opined that M/s. Bansal Traders has not availed ITC against these Invoices during the period March 2020 to October 2020 as was evident from GSTR 3B return filed by M/s. Bansal Traders and GSTR-9 Annual Return filed on 5th February, 2021. If at all, GSTR 3B and GSTR 9 was filed on 5th February, 2021 how and under which circumstances the CGST Authority had certified in their first letter addressed to Investigating Officer that M/s. Bansal Traders has availed Input Tax Credit of CGST and SGST against Invoice Nos. 106 and 107. Although the concerned Officer (GST) was requested to explain the anomaly, he could not explained it and satisfy the Court’s query. Thus, subsequent communication dated 13th August, 2021 addressed directly to Applicant is ignored.
11. For the reasons stated above, the evidence collected in the course of investigation, prima facie, shows Complainant delivered the goods to Sarfaraz at the instance of the Applicant and after delivery, he denied Complainant’s claim and refused to pay him. Facts of the case constitute offence of cheating and, therefore, application deserves no consideration.
12. Application rejected.