The Mumbai Court has granted the bail to erstwhile director of one Quenteco World Ltd, Dhwani Dattani on the grounds that the GST department spiked demand from Rs. 5.46 Cr to Rs. 11 Cr merely to justify arrest.
The bench of G. R. Dhepe (Additional Chief Judicial Magistrate) the department has inflated said demand of GST in order to arrest the applicant since the threshold to arrest the person for any alleged offence is Rs. 5 crore and above. Thus it shows the difference of input tax credit both therein. It is admitted to the respondent that as per DRG intimation the demand of Rs. 5.49 crores have been paid by way of GST credit reverse and by bank transfers. As a matter of fact the threshold to arrest the accused for alleged offence is Rs. 5 crores and more. Thus it shows utilisation of inadmissible input tax credit by applicant around 5.51 crores. The applicant is in jail for a long time. She’s a lady. During her judicial custody it appears no any inquiry conducted with her. It is stated by the applicant that the applicant has no intention to avoid payment of GST amount.
The applicant/accused is a 31 years old female who is erstwhile director of one Quenteco World Ltd and resigned from the post of director from Quanteco in the month of February. 2024.
The summons dated 21.03.2025 was issued for attending on 22.03.2025. The summons was merely a witness summons to give deposition. In view of the same the GST department has not complied guidelines as laid down in the case of Radhika Agarwal V/S Union of India wherein the Supreme Court was pleased to hold that the provisions of CRPC/BNSS are applicable to the investigation that is to be held under GST.
Dr. Sujay Kantawala, the counsel for the applicant submitted that GST department has failed to provide any summons to the applicant i.e. akin with a summons/notice under Section 41A of Cr. P. C./Section 35 of BNSS which is issued to the accused to remain present before the concerned officer for the purpose of investigation and not as a witness.
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The applicant has requested to grant her time till 31.03.2025 to attend the office of GST. But on 29.03.2025 officers waited at her door to arrest her without any grounds to arrest her. They arrested her in an arbitrary manner.
They failed to explain grounds for arrest when she was co-operating. The investigation has been going on since October, 2024. They have misused the powers under MGST Act. DRC 2 intimation quantified pending GST R.s 5.49 crores and surprisingly amount raised to an odd figure of Rs. 11 crores without explanation whatsoever for sudden spike in the alleged GST demand.
The department contended that the applicant is responsible person and claimed fraudulent input tax credit from non genuine entities for an amount of Rs. 11.15 crores. There si gross suspicion on the genuineness of the transactions entered into by tax payers and applicant that these were simply paper transactions with no actual purchase or delivery ever happened. The burden of proof to prove the same lies upon the applicant. The ITC of Rs. 11.15 crores claimed by the taxpayer is not correct and has been obtained fraudulently.
The court released Dhwani Paresh Dattani on bail on her executing Bond of Rs. 1,00,000 with one surety.
The court directed the provisionally released of the Accused on her furnishing cash bail of
more sureties in like amounts. Rs. 1,00,000 in lieu of surety for 2 months. She shall not influence and tamper with the prosecution witnesses and evidence. She shall cooperate for further investigation of the case.
Case Details
Case Title: M.s Dhwani Paresh Dattani The Assistant Commissioner of State Tax Mazgaon, Mumbai
Case No.: Bail Application No. 503/2025
Date: 24/04/2025
Counsel For Petitioner: D.r Sujay Kantawala
Counsel For Respondent: PP Mr. R. .K Pathak
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