I am a chartered account in one private limited company from last 10 years. i got good relationship with my client. he got 4 company in his name and he has opened 3 company in my family members name. in jan 2019 gst investigation tamilnadu and bangalore officer came to my client place as wel as in my office also. and told us that my client is involve in circular trading with all his and my firm to increase turnover for bank limit. my client applied bail at bangalore and hosur ,but unfortunately both the place bail got rejected. at tamilnadu bail was rejected by madras high court, and at bangalore is was rejected by session court. my client is trying to get bail at supreme court. in my firm he did some 30 crore transaction in gst in each 3 company. as per gst official in these transaction physical delivery of material not happened. gst officer evoked section 132 and now officer want to arrest the directors for investigation. now i want to know that since my client used my credential to open gst firm and done transactions. i dont have any thing to do with all these firm. my client was full control our my firm also. in my firm there is no bank limit. only in my client company he got limit. when i came to know about this transaction i was told to my client not to do any transaction in my firm. from april 2018 till date there is no transaction in my firm. now i want to come out with the legal problem. what is my remedy. how i can prove myself innocent before court. can i file affidavit in court . in my company all transaction happen from my client company only. there is not bill he has raised to other party. in our firm bank account also payment came from his company account and went to his other company account only. he has used my name, my wife name and my mother to get gst registration. he has file all returns and paid all tax to government. pls advice us.
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file police complaint against your client for cheating , fabrication of documents .
2) in your complaint mention he has fraudulently opened 3 companies in your family member name to do circular trading to increase turnover for bank limit
3) GST registration was fraudulently obtained in name of family members
You need to first inform all the facts to the police or investigation officer. After that you can pray to the court in your anticipatory bail application that you have not played any role in the said transaction and ABA may be granted to you.
sorry to say but if you voluntarily lent your name and that of your family members to your client for his various transactions through the company floated by him in the name of you/your family members, then how can you claim to be exonerated?
you will be prosecuted for abetting or aiding your client's transactions to increase his bank limit
i do not see how you can claim to be free from any liability, except on the ground of fraud by saying that all these shell companies were opened by your client without your consent and knowledge [but that too would not be correct as you yourself agreed to lend the names since you have good relations with the client]
law will take its own course now
The only way out in this case is that in case by any power of attorney you have provided the right to control the companies Incorporated and your credentials then only you can who win the court that you had no interest in the today transactions made in the companies.
you can take go for stay of arrest arrest from the High Court
The client had opened the companies in your wife's name and hence the trail of transactions will ultimately come to you and the investigation agency will catch you as he must have opened these companies in your wife's name as he must have had some ulterior motives.
Therefore obtain all the transactions between your and his company and scrutinise them so that you may have an explanation to give when they catch hold of you.
Regards
lodge your complaint on the official website of Central Board of Indirect Taxes and Customs.
You can also file a complaint against your client at police station under 420 468 with all facts and detailing.
Dear Client,
Your client was into circular trading to inflate his turnover by selling goods from one company to another but in real no actual trasfer of materials. This is rampant practice now days, and dealt sternly by officials/court.
You may not be accomplice but you permitted to open company in your name and family and provided signatures and id`s to get GST, open accounts etc. Sufficient to held you guilty.
Best defense you have, absence of mens rea. Absolute control was in him and no active participation in businesses neither any order/transaction or any material decision in the day to day business of firms. Apply for anticipatory bail.
Dear Sir,
You may get issue a legal notice or directly file a petition before High Court to direct the police not to involve yourself in proposed offences allegedly committed by your client since you have done your job bonafidely and innocent about the transactions made by your client.
See firstly approach session court , you, your wife and your mother obtain an anticipatory bail to avoid arrest.
The DGGI or DRI as per the investigation agency in your matter shall issue show cause notice and file prosecution in court based on same the matter needs to be contested.
The copy of all returns transactions needs to be annexed to anticipatory bail to convince court this is invoice fraud for credits and department can implicate all associated companies.
Dear Sir,
It is better to get issue a legal notice and also file a petition in High Court.
You being a chartered accountant you cannot claim innocence of law as an excuse.
Being a prudent person, you should not have accepted your client to operate a company under your name, this would be treated as if you are in the knowledge of all such fraudulent activities of your client or you are also involved in this act.
Now whatever you have written are to be taken up during the trial proceedings only and not at the time of arguing for bail.
If you have also been impleaded in the case then you may also obtain AB immediately before the pop lice take any action to arrest you on the basis of FIR.
