Pre-arrest bail was denied to buyer in a case of disputed transaction between buyer and seller.

This is a case where seller claims to have generated GST invoices and delivered the goods to buyer, whereas buyer denies the entire transaction and claims not to have availed ITC on said invoices. Ofcourse the payment is under dispute. 

Background

Applicant has filed this petition for pre-arrest bail.

The subject crime was registered at the instance of Esjaypee Mercantile Global Private Limited (The Complainant). This company is engaged in the trading of dry-fruits and spices.

In March, 2020, co-accused Sarfaraz (a broker) introduced the applicant to the complainant and informed him that applicant requires, large quantities of cloves.

Both Sarfaraz and applicant, allegedly agreed to make payments for the goods within few days after delivery. At the relevant time, complainant’s goods were stocked at, All India Storage and Warehousing situated at Navi Mumbai. The complainant sent an email to the Cold Storage and Warehousing on 2nd March, 2020 asking the Warehouse Manager to transfer 100 bags of cloves worth ₹ 22,90,842/- to applicant’s firm and vide another email dated 3rd March, 2020 asked the Manager to transfer 200 bags of cloves worth ₹ 51,30,777/- to applicant’s firm. Pursuant to the emails, Cold Storage and Warehousing service provider, transferred 300 bags of cloves in the name of applicant’s firm. On 4th March, 2020, 150 bags of cloves were delivered at Godown No.G-39 of Sarfaraz, spice market premises. On 5th March, 2020, the second consignment of 150 bags of cloves were delivered to Sarfaraz at his godown.

Soon thereafter, complainant has drawn the invoices. He filed the GST returns. Since the complainant did not receive the payment, notice was issued to the applicant and the co-accused, Sarfaraz and were called upon to make the payment. Applicant replied the notice through his Advocate stating that, he had not received the goods from the complainant. After which on a written complaint, crime in question came to be registered on 8th May, 2021.  

Applicant

Applicant has denied the entire transaction and submitted that, applicant had never entered into transaction with the complainant, nor applicant availed Input Tax Credit.

Applicant submitted that he has raised a grievance with the GST Officer thereby bringing to his notice, the fraudulent invoices were raised by the complainant. Applicant also invited my attention to a Certificate issued by M/s. Rahul Pramod & Co. Chartered Accountants, to submit that, applicant has not availed the credit of CGST and SGST in GSTR-9 from the available credits in GSTR-2A returns.

Applicant submitted that, neither the delivery challans nor the invoices were ever acknowledged or received by the applicant and a false case has been filed against him.

Counsel of applicant further submitted that, custodial interrogation of the applicant is not required since the prosecution is largely relying on the documentary evidence. It is submitted that, applicant is a permanent resident of Mumbai and his presence for investigation and trial can be secured by imposing appropriate conditions. On these grounds, the applicant seeks bail.

Respondent

Mr. Dedhia, learned APP, on the other hand, would submit that, statement of the Warehouse Keeper, Mr. Mishra, and the relevant documents collected in the course of investigation, indeed show that, after receiving the stock transfer request from the company of the complainant, clove bags were transferred from Lot No.1333 in the name of applicant, vide receipt No. 2667.

The statement of Mishra, shows that son of the applicant had called him on mobile asking him to deliver 300 bags of cloves in vehicle Nos. MH-04-DS-4070 and MH- 04-AL-9188. Owner of these vehicles told the police that, on 4th March, 2020, applicant called him on mobile and asked to make available two vehicles for transporting 300 bags of cloves. The statements of drivers, reveals that, on 4th March, 2020 and 5th March, 2020, they had delivered 300 bags (150 +150) of cloves at Godown G-39 at spice market, Navi Mumbai.

High Court

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