2020 (11) TMI 1031 - HC - GST

Seeking grant of bail - availment of fake and fraudulent input tax credit - compounding of offences u/s 138 of the Central Goods and Services Tax Act, 2017 - It is a case of tax evasion and the offences registered against the applicant is compoundable and that the applicant has made his intention clear that he is willing to compound the offences against him in future. The application is allowed and thus the interim bail granted to the applicant is confirmed as regular bail - this application filed by the applicant under Section 439 of the Cr.P.C. for grant of regular bail is hereby allowed.

Summary

Issues:
Application under Section 439 of Cr.P.C. for bail in connection with a GST offence.

Analysis:
The petitioner, a partner in a cement trading and manufacturing business, was arrested for an offence under Sections 132(1)(C) of the C.G.S.T. Act, 2017. The arrest followed raids by the Director General of G.S.T. Intelligence and a preventive authority, leading to the seizure of relevant documents. The petitioner, cooperating with the investigation, expressed intent to compound the offence, citing precedents where prosecution can only commence post-assessment completion. The respondent alleged tax evasion of about ?12 crores through fraudulent Input Tax Credit availed using fake company invoices. The respondent argued against bail, emphasizing the seriousness of the offence and its impact on the state's economy, citing legal precedents to support denial of bail.

The court considered the nature of the offence, the compoundable aspect, and the petitioner's willingness to compound the offence in the future. Acknowledging the tax evasion and the petitioner's clear intention to compound the offence, the court allowed the application for bail. The interim bail granted was confirmed as regular bail, with conditions including a personal bond and surety for the petitioner's appearance as directed by the court. The petition was disposed of accordingly.