2021 (3) TMI 1217 - HC - GST

Seeking grant of Bail - wrong claim GST - Fake invoices without supply of goods - Section 132 of Central Goods and Services Tax Act, 2017 - HELD THAT - It is deemed proper to allow the bail application - it is directed that accused-petitioner shall be released on bail provided he furnishes a personal bond in the sum of ₹ 1,00,000/- together with two sureties in the sum of ₹ 50,000/- each to the satisfaction of the trial Court - application allowed.

Summary

Issues: Bail application under Section 439 Cr.P.C. for offence under Section 132 of Central Goods and Services Tax Act, 2017 involving alleged wrong claim of GST.

Analysis:
1. Issue of Bail Application: The petitioner filed a bail application under Section 439 Cr.P.C. due to being in custody since 03.12.2020 for an offence under Section 132 of the Central Goods and Services Tax Act, 2017, related to a wrong claim of GST amounting to ?7.09 crore. The petitioner contended that the dispute involved four firms, with the petitioner being the proprietor of one and a partner in another. The counsel argued that proper assessment had not been done, and there was no evidence of fake invoices, with the maximum sentence being five years for offences under ?5 crore, making it bailable.

2. Contentions of Petitioner: The petitioner's counsel argued that despite the allegations, there was no statement regarding fake invoices, and even if there were discrepancies in the HSN code, it would not exceed ?5 crore. The counsel emphasized that the petitioner's involvement was limited to specific firms and that the offence fell within the bailable category due to the amount involved being less than ?5 crore under the Act.

3. Union of India's Opposition: The counsel representing the Union of India opposed the bail application, alleging that the petitioner had generated fake invoices without actual supply of goods, resulting in a wrongful claim of GST amounting to ?7.09 crore. This opposition was based on the seriousness of the offence and the misuse of the tax system.

4. Judicial Decision: After considering the contentions from both sides, the Hon'ble Judge deemed it appropriate to grant bail to the petitioner. The bail application was allowed, with the condition that the accused-petitioner would be released upon furnishing a personal bond of ?1,00,000 and two sureties of ?50,000 each. The petitioner was required to appear before the trial Court and any subsequent Court hearings as necessary.

In conclusion, the judgment by the Rajasthan High Court granted bail to the petitioner based on the arguments presented, the nature of the offence, and the provisions of the Central Goods and Services Tax Act, 2017. The decision balanced the interests of justice with the petitioner's right to seek bail, setting out specific conditions to ensure compliance with legal proceedings.