CA Bail rejected; 2 officers suspended ; ICAI met FM sitharaman

gst fraud CA bail

CA bail rejected: The ACJM in Gurugram has denied two Chartered Accountants’ bail applications in the recent GST refund fraud case. Chartered Accountants have organised a Candle March protest against the arbitrary detention of two chartered accountants by the DGGI, Gurgaon CGST Department on suspicion of providing an unjust enrichment certificate in a GST refund case.

GST Fraud case

CGST Department Gurugram for more than 48 hours detained 2 CAs in the premises for providing an unjust enrichment certificate in a GST refund case. They misbehaved with them, removed their clothes and treated them like criminals/terrorists. The basis of charge is a certificate issued by CAs under rule 89(2)(m) of CGST Rules which was used by the client for claiming refund of INR 15 Cr. As per the prescribed procedure, refunds are sanctioned based on long list of documents.

Gurgaon GST Department Response

After three days, the GST department responded to the alleged illegal detention, stating that the two were arrested and remanded in judicial custody for 14 days in connection with a Rs. 20 crore scam. It stated –

“On the basis of a specific complaint and careful data analysis, officers of the CGST Gurugram Commissionerate detected a case of fraudulent availment of ITC and consequent refunds of about Rs. 20 Crore in the name of 8 firms found to be non – existent. Investigation conducted thus far has revealed the involvement of three persons. One private person was arrested on 06.05.2022 and was remanded to judicial custody upto 21.05.2022. Further, two Chartered Accountants were arrested on 18.05.2022. and have been remanded to 14 days judicial custody by the jurisdictional Court. Investigations are continuing for tracing the beneficiaries of the refunds and the role of the officers, if any.”

2 officers suspended

CBIC has suspended the GST superintendent & Deputy Commissioner in the GST refund fraud case.

ICAI ensured CA’s are not made soft targets

In a Council Meeting conducted on May 20, 2022, the ICAI Central Council made a decision following deliberations on the recent arrest of Chartered Accountants and other incidents of ill-treatment of CAs by investigating authorities.

The Council members expressed their strong resentment on the matter in which certain Investigating Officers are treating CAs and directly resorting to arrests. The Council was also apprised of the strong feelings of members throughout the country regarding ill-treatment being meted to certain members rather than taking strong action against the actual perpetrators.

The Council of ICAI resolved to form a Group comprising of its members to interface with authorities in order to ensure that just and fair treatment is meted out to Chartered Accountants and that they are not made soft targets.

CA Bail Rejected

Advocate Mr. Harsh Sethi argued that not a single document bears the Applicant’s genuine signature; rather, the Department claims in the Remand Application dated 19.05.2022 that accused Gaurav Dhir is the main accused, and that Gaurav Dhir has only forged the Applicant Sunil Mehlawat’s signatures on the alleged documents, making the Applicant appear to be the victim rather than the accused.

It was also argued that under section 132 of the CGST Act, 2017, a maximum penalty of only 5 years can be imposed, and thus there was no reason to arrest the Applicant based on the Hon’ble Supreme Court of India’s established guidelines in Arnesh Kumar Vs State of Bihar.

However, CA bail rejected.

ICAI met FM Sitharaman

ICAI discussed the current matter at CGST Gurugram, actions taken alongwith the future roadmap. Discussions were also held regd. creating awareness & propagation of Govt. policies amongst public at large & to further strengthen the involvement of ICAI with Hon’ble Minister.

The ICAI representatives informed Smt Nirmala Sitharaman that they will continue to use the recently-enacted ‘CA, CWA and CS Act’ for the inculcation of professional discipline & integrity among its members.

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