Mumbai, August 30, 2022 – Kunda Deepak Mhatre, a 45-year-old businesswoman, has been granted bail by the Sessions Court in Mumbai in connection with an alleged Goods and Services Tax (GST) fraud case. Mhatre was arrested by the Central Goods and Services Tax & Central Excise (CGST) authorities for allegedly availing Input Tax Credit (ITC) based on forged invoices, an offense punishable under Section 132 of the GST Act.

The Allegations

The CGST authorities alleged that Mhatre, proprietor of M/s Bswar Industries, availed inadmissible ITC worth Rs. 7,20,62,869 by showing transactions with non-existent firms. They claimed that Mhatre played an active role in the commission of the offense and had admitted to the fraud in her statement recorded under Section 70 of the CGST Act.

Mhatre’s Defense and Arguments

Mr. Suraj Singh, representing Mhatre, argued that his client was falsely implicated. He stated that Mhatre’s statement was recorded under Section 70 of the CGST Act and that the authorities had filed a complaint against her in the Magistrate’s Court, making her further detention unnecessary. He also argued that Mhatre is a permanent resident of Mumbai and there was no possibility of her absconding. Mhatre claimed that her GST number was misused by someone else, and the business was not in running condition.

Prosecution’s Objections

Mr. Natrajan, the Special Public Prosecutor (SPP) representing the CGST, opposed the bail application. He argued that Mhatre had availed inadmissible ITC using forged invoices and non-existent firms, and that she had admitted to the offense in her statement. He contended that Mhatre had committed multiple offenses related to ITC and that she was not entitled to bail due to the economic nature of the crime.

Court’s Observations and Decision

Additional Sessions Judge Shri A.A. Kulkarni considered the submissions from both sides and the documents on record. The court noted that Mhatre and Amit Jatashankar Dubey had both denied issuing invoices or filing returns under the GST Act, and that they had claimed Mhatre’s GST number was misused. The court also noted that Mhatre’s business was not operational and that there was a possibility of her GST number being misused.

“Looking in to background, it is on record that, business of applicant is not in running condition, there was only registration for GST number, hence possibility of misuse of GST number cannot be ruled out,” Judge Kulkarni stated in the order.

The court also observed that the CGST authorities had filed a complaint against Mhatre in the Magistrate’s Court and that there was no need for further custodial interrogation. Considering these factors, the court decided to grant bail subject to certain conditions.

Bail Conditions

Mhatre was granted bail on a personal bond of Rs. 50,000 and one or two sureties of the same amount. The court imposed the following conditions:

• Mhatre must attend the CGST & Central Excise, Bhiwandi Commissionerate, Parel (East), Mumbai office upon receiving a notice from the Investigating Officer.
• She must provide her residential address proof and contact numbers to the Investigating Officer.
• She must not directly or indirectly influence, threaten, or promise any person acquainted with the case.
• She must not leave India without prior permission from the court.
• The bail process will be completed before the lower court.

The court’s decision reflects a consideration of the statements made by Mhatre and Dubey, the possibility of misuse of Mhatre’s GST number, and the filing of a complaint in the Magistrate’s Court. The conditions imposed aim to ensure Mhatre’s cooperation with the ongoing judicial process and prevent any interference.