2022 (2) TMI 1411 - HC - GST

Seeking enlargement on bail - fraudulent passing on the said Input Tax Credit to different firms/companies by way of merely issuing invoices without actual supply of goods - HELD THAT - The allegations in the present petition are certainly having high magnitude involving about Rs.128.82 crores. According to the learned Senior Standing counsel, the material witnesses are yet to be examined. The apprehension expressed by the learned Senior Standing counsel that in case the petitioner is released on bail, he may influence the witnesses or abscond from justice cannot be ignored. At this stage, therefore, considering the gravity of the offence and the aforesaid circumstances, this Court is of the considered view that the petitioner is not entitled for the grant of regular bail. Finding no merit, the petition is hereby dismissed.

Summary

Issues: Bail application under Section 439 of Cr.P.C.

Detailed Analysis:
1. Issue of Falsely Implicated Petitioner:
The petitioner, seeking bail under Section 439 of Cr.P.C., argued being falsely implicated in a case involving passing on inadmissible Input Tax Credit (ITC) amounting to approximately Rs.128.82 crores by 6 entities. The petitioner claimed no association with at least 3 of the entities under investigation, emphasizing lack of evidence linking him to the alleged offense based solely on documentary evidence.

2. Allegations by Respondent:
The respondent contended that the petitioner actively managed 6 entities involved in passing on inadmissible ITC through fraudulent means, causing a substantial loss to the Government revenue. The petitioner was accused of orchestrating a scheme where entities issued bogus invoices without actual supply of goods, defrauding the Government exchequer. The respondent highlighted the petitioner's role in managing dummy firms and causing a significant financial loss to the Government.

3. Argument on Bail Grant:
The learned Senior Standing counsel opposed bail, citing pending examination of material witnesses and the fear of witness tampering or absconding if the petitioner is released. The gravity of the offense, the high financial magnitude involved, and the likelihood of the petitioner influencing the case were key factors in denying bail.

4. Court Decision:
The Court, after considering the arguments and circumstances, dismissed the bail application. The Court emphasized the seriousness of the offense, the pending examination of crucial witnesses, and the risk of witness interference or flight if the petitioner is granted bail. The decision was made based on the gravity of the offense and the potential influence the petitioner could exert on the case.

5. Final Remarks:
The Court clarified that the dismissal of the bail application should not be construed as an opinion on the merits of the case but a decision based on the current circumstances and considerations. The denial of bail was grounded in the substantial financial implications of the alleged offense, the involvement of multiple entities, and the potential risk associated with releasing the petitioner at that stage of the investigation.