The Bombay High Court on Friday granted interim protection from arrest to Sunil Biyani, non-executive director of the Future Group, in connection with an alleged multi-crore Goods and Services Tax (GST) fraud currently under investigation by the tax authorities.
In Sunil Biyani v. Union of India & Ors, Justice N.R. Borkar observed that no formal order authorising arrest had been issued by the Central GST authorities under Section 69 of the Central Goods and Services Tax (CGST) Act. In the absence of such an order, the Court held that there was no immediate basis for arrest.
āIn the absence of an order under Section 69 of the CGST Act, the applicant cannot be arrested. In that view of the matter, at this stage, the present anticipatory bail application cannot be entertained,ā the Court noted.
However, the Court clarified that if the competent authority subsequently passes an arrest order under the statute, Biyani shall not be arrested for a period of one week from the date on which such order is communicated to him. This limited protection was granted to enable him to seek appropriate legal remedies.
Background of the Investigation
Biyani approached the High Court after the Directorate General of GST Intelligence (DGGI) issued summons to him as part of an ongoing probe into an alleged fake invoicing and circular input tax credit (ITC) racket. The investigation concerns transactions reportedly involving more than ā¹200 crore in GST implications arising from invoices and ITC claims that allegedly exist only on paper without corresponding genuine business activity.
According to an affidavit filed by the GST Intelligence authorities, the case also involves foreign remittances amounting to ā¹1,208.77 crore. Of this, approximately ā¹217.57 crore in GST is stated to be payable, along with nearly ā¹50 crore in allegedly ineligible input tax credit.
The authorities claim that around ā¹664.70 crore of these remittances were routed through Alphaneon Studioz and Pindflix Entertainment, entities in which Biyani had served as a director. Alphaneon Studioz is specifically accused of availing approximately ā¹20 crore in ineligible input tax credit on the basis of invoices issued by suppliers who were subsequently found to be non-existent or not operating from their registered premises.
The DGGI has contended that the alleged scale of tax evasion, the complexity of layered financial transactions, and the volume of electronic evidence necessitate custodial interrogation to effectively unravel the purported scheme.
Biyaniās Defence
In his plea seeking pre-arrest protection, Biyani asserted that he had tendered his resignation via email from the relevant company in July 2023. He alleged that he has been falsely implicated through fraudulent company filings made by Alphaneon Studioz after his resignation.
Biyani denied any involvement in the alleged tax fraud and maintained that he has consistently expressed willingness to cooperate with the investigation. He submitted that he had offered to respond to the summons in writing and had not evaded the inquiry.
The matter highlights the ongoing judicial scrutiny over the exercise of arrest powers under Section 69 of the CGST Act, particularly in cases involving allegations of large-scale GST evasion.
Advocates Abhinav Chandrachud, Abhishek Salian and Mayuresh Ingale appeared on behalf of Biyani. The GST Intelligence authorities were represented by advocates J.B. Mishra, Sangeeta Yadav, Rupesh Dubey and Umesh Gupta.
The investigation remains ongoing.
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