2020 (12) TMI 1269 - DSC - GST

Application for pre-arrest bail - wrongful availment and passing on of input tax credit or not - serious allegations against the applicant in respect of evasion of tax - HELD THAT - Upon perusal of the allegations made against the applicant it is prima facie revealed that the applicant has supplied goods without invoices and that issued invoices but without supplying goods in contravention of the provisions of the GST Act. Upon perusal of the objection taken by the respondent, it is crystal clear that the applicant is not interested to co-operate the investigating agency. Not only this the prosecution has specifically quoted the incident dated 18.11.2020 stating that on that day, the statement of the applicant was recorded but the applicant without signing the statement and the permission of the Investigation Officer had left the premises. The statement has not been controverted by the applicant by filing counter affidavit. This shows the attitude of the applicant that he is not interested to extend co-operation to the Investigation Agency. Thus, if the bail as claimed by the applicant is granted in his favour in that case certainly it would adversely affect the further investigation - In view of the observations and the allegations made against the applicant, no case is made out for exercising discretion for grant of pre-arrest bail. Bail application dismissed.

Summary

Issues:
Application for pre-arrest bail under Section 438 of the Cr.P.Code.
Allegations of GST evasion and economic offences.
Applicant's cooperation with the investigation.
Applicant's medical discharge to evade arrest.

Analysis:

Issue 1: Application for pre-arrest bail under Section 438 of the Cr.P.Code.
The applicant, a managing director of a company, sought pre-arrest bail fearing arrest by the respondent due to allegations of GST evasion. The applicant cooperated with the investigation, denying any wrongdoing and claiming no money trail implicating him. The respondent objected, alleging substantial loss to the government through fraudulent practices. The respondent argued that the applicant issued bogus invoices and availed wrongful input tax credit, involving significant amounts. The investigation revealed discrepancies in the transportation of goods and lack of cooperation from the applicant during the inquiry.

Issue 2: Allegations of GST evasion and economic offences.
The respondent's objections highlighted grave allegations against the applicant, including issuing invoices without actual movement of goods, causing a loss to the government. The respondent argued that the applicant's company engaged in fraudulent practices, passing on GST credit without physical goods movement. The investigation pointed out discrepancies in the invoices submitted by the applicant and lack of actual transportation of goods as claimed. These allegations raised concerns about the seriousness of the economic offences committed.

Issue 3: Applicant's cooperation with the investigation.
The applicant's advocate cited relevant judgments to support the applicant's entitlement to pre-arrest bail, emphasizing the applicant's cooperation with the investigation. However, the respondent contended that the applicant failed to provide essential documents and showed reluctance to appear before the Investigation Officer despite multiple summons. The respondent highlighted instances where the applicant left the premises without signing statements, indicating a lack of cooperation with the investigation.

Issue 4: Applicant's medical discharge to evade arrest.
The respondent presented medical papers showing the applicant's discharge from the hospital against medical advice, suggesting an attempt to evade arrest. The applicant's behavior, leaving the hospital without returning for further medical consultation, raised concerns about his intentions to avoid legal proceedings. This conduct, combined with the lack of cooperation with the investigation, portrayed a negative image of the applicant's commitment to the legal process.

In conclusion, considering the serious nature of the economic offences alleged, the lack of cooperation by the applicant with the investigation, and the attempt to evade arrest, the court rejected the application for pre-arrest bail. The court emphasized the need to view economic offences gravely, highlighting the impact on public funds and the country's financial health. The judgment reflects a stringent approach towards cases involving significant financial implications and emphasizes the importance of cooperation with legal proceedings.