The High Court of Gujarat recently cleared a retired sales tax officer who was allegedly involved in fraudulent postings and VAT assessments using the VATis system.
Apparently, the plaintiff, a sales tax agent, who retired as Superintendent of Taxes, made false postings in the VATis system and receipts were generated and by committing misappropriation offences, causing a loss to the public treasury of Rs.5,98,29,882/-, of which an amount of Rs.1,98,75,998/- has been recovered and at present an amount of Rs.3,99,53,884 /- still needs to be picked up from gas pump vendors. It was alleged that Advocate Kamlesh Heruwala, Accountant Sagar Banawala, Senior Registrar Nareshbhai Savabhai Chowdhury, Senior Registrar Prakashbhai Jagdishbhai Chudi posted the posts from the login ID of other employees. Thus, it is alleged against the present petitioner that in collusion with Barrister Kamlesh Heruwala and others, under the VAT Act, fraudulent postings and valuations were made in relation to the registered traders.
The main allegations against the current claimant were that the claimant’s login id was used to cause 207 entries into the VATis system, of which 29 dealers generated an acknowledgment to the tune of Rs.86,22,879/-. Further, it is alleged that with respect to the evaluation of 4 dealers for the 2015-2016 financial year, manual challans were approved without proper verification.
Plaintiff’s learned lawyer argued that this was a case of misuse of plaintiff’s login ID and password.
Referring to Section 34 of the Gujarat VAT Act, Judge Gita Gopi observed that whether there was a criminal conspiracy or negligence by the claimant would be a matter to be considered during of the trial by providing evidence. “How the challans were manipulated and false entries were made in the VATis system with intent to defraud by causing loss to the public purse would be a question of fact.”
Granting regular bond to the claimant, the High Court found that “However, for the amount of Rs.5,98,29,882/- which is noted as being in relation to the 29 defaulters, the data could not match the System VATis from the year 2013. A recovery of Rs.1,98,75,998/- has been made and the Department is said to be recovering the rest of the money from the registered traders. Whether an unlawful gratuity was received by the present petitioner for manipulated and fraudulent entries with the intention of causing loss to the public purse would be a matter of evidence which would have to be considered at trial. Further, given that the indictment is filed and given the facts and circumstances of the case, the Court finds this to be an appropriate case where discretion could be exercised in favor of of the applicant. »
ASHWINBHAI KANTILAL JOSHI v GUJARAT STATE
CITATION: 2022 TAXSCAN (HC) 109
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