Judicial Relief for Legal Professional: Gujarat High Court Grants Bail in GST Fake Invoicing Matter
The intersection of professional compliance services and alleged economic offenses often places legal practitioners and consultants under severe scrutiny. In a significant judicial development, the Gujarat High Court recently adjudicated on the bail application of an advocate implicated in a massive Input Tax Credit (ITC) fraud network. The ruling in the matter of Rohitkumar Parsotambhai Sanghani v. State of Gujarat & Anr. provides critical insights into how the judiciary evaluates the proportionality of an accused's role, especially when the individual is a professional rendering statutory compliance services for an assessee.
Factual Matrix of the Dispute
The controversy stems from the alleged creation and operation of dummy business entities designed to siphon off government revenue through fraudulent ITC claims. The applicant, a practicing legal professional, was apprehended by the authorities for his purported involvement in this syndicate.
According to the prosecution, the advocate was responsible for processing and submitting statutory GST returns on behalf of several companies. The core of the accusation was that the applicant executed these filings with the full knowledge that the respective assessee firms were entirely fictitious and existed only on paper.
During the course of the investigation, the authorities recorded the applicant's statement under the provisions of Section 70 of the Central Goods and Services Tax Act, 2017. In this deposition, it was prima facie revealed that the legal professional was aware of the non-functional nature of certain client entities. These shell firms were allegedly incorporated with the sole malicious intent of generating and passing on bogus tax credits, completely devoid of any underlying physical movement or supply of goods.
Consequently, the State initiated stringent penal proceedings against the advocate, invoking Section 132(1)(b) and Section 132(1)(c) of the Central Goods and Services Tax Act, 2017 read with the corresponding provisions of the Gujarat Goods and Services Tax Act.