{"id":233277,"date":"2020-08-01T17:09:23","date_gmt":"2020-08-01T11:39:23","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=233277"},"modified":"2020-08-07T11:34:40","modified_gmt":"2020-08-07T06:04:40","slug":"ori-hc-enormity-of-devious-activities-touch-raw-nerve-of-economic-system-and-strike-at-the-root-of-proper-effective-functioning-of-gst-regime","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/08\/01\/ori-hc-enormity-of-devious-activities-touch-raw-nerve-of-economic-system-and-strike-at-the-root-of-proper-effective-functioning-of-gst-regime\/","title":{"rendered":"Ori HC | “Enormity of devious activities touch raw nerve of economic system and strike at the root of proper & effective functioning of GST regime”"},"content":{"rendered":"

Orissa High Court:\u00a0<\/strong>S.K. Paigrahi, J., while addressing a matter, observed that,<\/p>\n

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One cannot lose sight of the fact that GST regime is relatively new and is still evolving.<\/span><\/p>\n

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“…attempts to dampen the spirit of GST proper implementation are already assuming huge proportions and need to be curbed with an iron fist so that the contours of fiscal compass will be extended to the advantage of the people.”<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n<\/div>\n<\/div>\n<\/div>\n

Petitioner filed the bail application under Section 439 of the Criminal Procedure Code, 1973 for being punishable under Section 132(1)(b)(c) and (1) of the OGST Act, 2017.<\/p>\n

Business transactions were made using several fictitious firms including G.S Unitrade,\u00a0 G.S. Steels and Alloys Co., B.B Associates, Om Shri Ganesh Traders. Petitioner, Ronak Beriwal, Subhash Chandra Swain and Basanta Kumar are the proprietors of GS Unitrade, G.S. Steels & Alloys Co, B.B. Associates and Omm Shree Ganesh Traders respectively.<\/span><\/p>\n

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Above persons, individually and in collusion with each other alleged to have created several dummy and non-existent entities to avail bogus Input Tax Credit (ITC), for the purpose of defrauding the Revenue.<\/p>\n<\/div>\n

Concern\u00a0<\/span><\/strong><\/p>\n

Creation of dummy and non-existent firms was the matter of concern.<\/p>\n

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Fake and fraudulent transactions have, among others, caused huge loss to the State exchequer at least to the tune of Rs 122.67 crores.<\/p>\n

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Fraud<\/span><\/strong><\/p>\n

After intensive analysis of data from GSTN\/e-way bill portal and inputs from various sources, the Joint Commissioner of State Tax, CT & GST Enforcement Range, Sambalpur detected the fraud committed by the accused.<\/p>\n

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Several incriminating documents, containing business transactions of such business entities, were unearthed and seized.<\/p>\n

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Petitioner, in his capacity as the proprietor of G.S. Unitrade, had shown to have purchased goods from many bogus firms and has availed ITC on the strength of fake invoices, without actual transfer of goods.<\/p>\n

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“…manner in which the accused, in collusion with other accused, had been operating would suggest that there are certain inherent flaws in the GST system, which is prone to such abuse.”<\/p>\n

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“Fraudsters are taking advantage of the inadequacy of electronic trails of all transactions by employing ingenious methods.”<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n

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The search and inspection conducted by the State Authorities revealed that no business was actually being conducted by the declared place of business.<\/p>\n

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Fictitious firms were created in the name of many daily labourers, private tutors, housewives etc., with the help of their identity documents like PAN, Aadhaar Card, Mobile phone, Voter Card, etc.<\/p>\n

Hence accused was alleged to have committed of offences under Section 132(1)(i) read with Section 132(5) of the OGST Act, 2017, which are a non-bailable and cognizable.<\/span><\/p>\n

Decision<\/span><\/h4>\n
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In the instant case, the alleged GST fraud committed by the petitioner is having humongous ramification on the revenue collection by the State.<\/p>\n

Further the bench added that, the possibility of the accused tampering the evidence and\/or influencing\/intimidating the witnesses also cannot be ruled out.<\/span><\/p>\n

Moreover, the Courts cannot lose sight of the adverse impact such activities would have in the economy.<\/span><\/span><\/p>\n

Bench stated that a large number of cases emerged in different parts of the country where such persons, with vested interests, have created a host of unscrupulous and bogus entities.<\/span><\/p>\n

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Fake entities are then used for the purpose of indulging in issuances of false and fabricated invoices, without actual movement or supply of goods and services and without payment of any GST to the public exchequer, but for the purpose of claiming ITC, by defrauding the Revenue.<\/p>\n

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Enormity of such devious activities touch the raw nerve of the economic system and strike at the root of the proper and effective functioning of the GST regime, which has been set up with the laudable object of “One Nation, One Tax, One Market”.<\/p>\n<\/blockquote>\n

High Court stated that a countrywide cartel specializing in defrauding the GST system is operating to bring the economy to its knees.<\/span><\/p>\n

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High Court declined the release of the accused p<\/span>etitioner on bail at this stage. Accordingly, the bail petition filed on behalf of the accused\/petitioner was rejected. [Amit Beriwal v. State of Odisha, 2020 SCC OnLine Ori 546 <\/b><\/a>, decided on 27-07-2020]<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Orissa High Court:\u00a0S.K. Paigrahi, J., while addressing a matter, observed that, One cannot lose sight of the fact that GST regime is <\/p>\n","protected":false},"author":8808,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[2664,42873,3211,10141,42872,6241,29554],"class_list":["post-233277","post","type-post","status-publish","format-standard","hentry","category-casebriefs","category-highcourts","tag-Bail","tag-economic-system","tag-Finance","tag-fraud","tag-fraudsters","tag-gst","tag-itc"],"yoast_head":"\nOri HC | "Enormity of devious activities touch raw nerve of economic system and strike at the root of proper & effective functioning of GST regime" | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2020\/08\/01\/ori-hc-enormity-of-devious-activities-touch-raw-nerve-of-economic-system-and-strike-at-the-root-of-proper-effective-functioning-of-gst-regime\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ori HC | "Enormity of devious activities touch raw nerve of economic system and strike at the root of proper & effective functioning of GST regime"\" \/>\n<meta property=\"og:description\" content=\"Orissa High Court:\u00a0S.K. 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