2020 (2) TMI 1573 - DSC - GST

Seeking grant of Bail - Evasion of CGST duty - recovery and seizure of a large number of incriminating documents indicating evasion of CGST duty - group of traders fabricating heavy sale and purchase transactions among themselves - HELD THAT - Despite the grant of opportunity to the learned Senior Special Public Prosecutor to let this Court know how the role of petitioner herein was graver than that of principal accused Vikas Goel who has already been granted the concession of bail it could not be explained away. Having regard to the totality of the facts and circumstances of the case including the ground of parity and trial not likely to be concluded in near future and accused having already spent a considerable duration in judicial custody this Court finds it a fit case for grant of concession of regular bail - The application is allowed and petitioner-accused Vinod Kumar Agarwal is admitted to bail subject to furnishing personal bond in the sum of Rs.2, 00, 000/- with one surety in the like amount to the satisfaction of the learned trial Court.

Summary

Issues involved:
Allegations of tax evasion through circular trading, arrest and judicial custody without concrete evidence, bail application based on parity with co-accused.

Analysis:
The judgment revolves around allegations of tax evasion through circular trading by the applicant in association with others, leading to evasion of CGST duty. The respondent claimed that the entities involved engaged in fake billing and circular trading without actual movement of goods, resulting in substantial evasion of GST. However, the defense argued that there was no loss of revenue as some amount was paid to the exchequer, and the transactions were made to inflate turnover for loan facilities rather than tax evasion. The respondent's case focused on the misuse of Input Tax Credit without actual supply of goods, leading to evasion of GST.

The judgment highlighted the arbitrary arrest and prolonged judicial custody of the applicant without concrete evidence of tax evasion or loss of revenue. It was argued that the respondent's assumptions lacked independent evidence and specific allegations corroborated by evidence. The defense emphasized that the entities involved had been operating since before the introduction of GST without any intention of tax evasion, indicating a lack of criminal intent.

Regarding the bail application, the defense sought parity with a co-accused who had been granted bail. The prosecution contended that the roles and evidence differed, opposing the grant of bail. However, the court, considering the totality of circumstances, including the time spent in custody and the ground of parity, granted bail to the applicant. The court found it a fit case for bail, emphasizing the need for personal bond and surety.

In conclusion, the judgment addressed the issues of tax evasion through circular trading, arbitrary arrest without concrete evidence, and the grant of bail based on parity with a co-accused. The court's decision to grant bail highlighted the importance of considering individual circumstances and the lack of substantial evidence supporting the allegations of tax evasion.