A Surat-based businessman accused of fraudulently claiming input tax credit under the Goods and Services Tax (GST) was granted temporary relief by the Gujarat High Court on December 2 after it emerged that the state and Centre were conducting parallel investigation under
their respective Acts for the same offence.
The court directed that there shall be no further proceedings with regard to the complaint filed by the central authority.
The accused, Rajesh Mundra, was arrested by the state tax unit of state GST (SGST) in February this year under appropriate provisions of the SGST Actfor allegedly operating as many as 14 fake firms to claim input tax credit (ITC), and was released on bail later.
In June, the Central GST unit (CGST) filed a complaint for the same offence, accusing Mundra of setting up as many as 33 fake firms. Mundra was arrested a second time, this time based on the CGST unit’s complaint, although he was released days later.
Represented by advocates Vishal Dave, Avinash Poddar and Nipun Singhvi, Mundra moved the Gujarat HC, seeking quashing of the CGST unit’s complaint. He contended that the central authority registering a second complaint for the same offence as registered by the state
authority amounts to double jeopardy and amounts to parallel investigation, which is not permissible under the provisions of CGST Act, given that proceedings have already been initiated under SGST Act.
Apart from quashing of the CGST complaint, Mundra has also sought a compensation of Rs 50 lakh.
The court of Justice Paresh Upadhyay issued notice to the respondent authorities of state and Centre and granted interim relief that no proceedings shall be taken against Mundra with respect to the CGST’s complaint. The matter has been kept for further hearing in January 2021.
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