In a recent decision dated 11.02.2021, the Hon’ble Delhi  High Court has granted anticipatory bail to Ms. Lupita Saluja in relation to the enquiry/ investigation being conducted by DGGI under CGST Act, 2017.

Lupita Saluja v. DGGI, Bail Application No. 319.2021

As per the case of the prosecution, the following arguments were made:

1. The Applicant along with her husband were alleged to have created five bogus export firms for the purpose of availing fraudulent ITC.
2. Enquiry had revealed that all suppliers were non-existent.
3. Further, it was alleged that none except one transporter had transported the goods for the companies in question.
4. A voluntary statement of the Applicant was brought on record, wherein she had stated that she has signed all the financial documents regarding day to day work of these firms.
5. the Applicant had received approx Rs. 279 crores from her companies accounts in her personal savings account.

To counter the case of the Prosecution, the Applicants put forth following submissions, as is evident from the judgment:

1. Rs. 279 crore credited in personal account of the Applicant were further debited to the accounts of the Companies for the sole reason of earning interest income. In this respect, bank statement and copy of audited ledger was produced
2. No allegation qua Section 132(1)(b)
3. That the Companies have validly availed ITC after fulfilling the criteria of Section 16
4. Goods supplied by suppliers are sent at the ICD, Tughlakabad and from there, it is further exported by Companies
5. Exports made by Companies are not disputed

Ruling of the Court

It is wholly misconceived that the suppliers are non-existent

1. No dispute that suppliers have valid PAN, bank accounts
2. Suppliers have been granted registration by the Respondents itself after doing complete verification from their end, in terms of Chapter VI of CGST Act, 2017
3. Suppliers have been filing requisite GST Returns and doing all compliances under CGST Act, on the basis of which ITC is credited to the Account of the Companies
4. From record, it is established that suppliers have supplied goods the companies, which have been further exported by Companies to the buyer
5. In addition to it, payments received from foreign buyers of the Companies are further transferred to the account of the suppliers via online mode.

Goods transported by suppliers have gone through extensive checks and inspections

The goods transported by concerned vehicle after due compliances of e-way bill requirements, which is linked to Regional Transport Authority. Moreover, the goods are transported by the concerned vehicle at ICD, wherein entry pass are issued by custom authorities and the goods are unloaded from the vehicle and are further inspected by the authorities. It goes to many checks and inspections by the Custom Authorities. This fact has not been investigated by the Respondents.

Further observati0ns

The Court also observed the following:

1. Bail was granted to Applicant’s husband after he spent nearly 50 days in custody
2. Investigating Agency has conducted as many as 5 raids and seized evidence such as original documents, purchase and sale invoices, ledgers and bank statements, hard disks, CPU, export details, etc
3. Writ petitions filed by Applicant challenging power of seizure and arrest
4. Applicant was never called upon to join investigation in about 1 year, but called first time, i.e. after her husband and she had challenged the entire investigation before the Court in the above mentioned writ petition.

Accordingly, the Hon’ble Court held that custodial interrogation of the Applicant is not required.

Gaurav Gupta

Website

Gaurav is an advocate by profession and has done his B.Com(H) from Hansraj College and LL.B(H) from Faculty of Law, Banaras Hindu University. He has represented clients from Diverse sectors, providing services in Litigation involving Indirect Taxes, IBC, Commercial laws, Direct Taxes, RBI matters. He is active beforewrit Courts, Tribunals and Quasi-Judicial Authorities.