2019 (3) TMI 431 - HC - GST

Bail application - offence punishable under Section 132 of Central Goods and Services Tax Act - it is alleged that petitioners have obtained Invoices from the Company of the respondent without delivery of the goods - Held that - On reading of Sections 132, 138 and 139 of the G.S.T. Act, it is found that the maximum punishment provided under the Act is five years and fine and if that is taken into consideration, the magnitude of the alleged offence and it is not punishable with death or imprisonment for life. Even as per the said provision, the alleged offence is also compoundable with the Authority, who has initiated the said proceedings. The only consideration which the Court has to consider while releasing the petitioners on anticipatory bail is, that whether the petitioners can be secured for the purpose of investigation or for the purpose of trial - thus, by imposing stringent conditions if the petitioners are ordered to be released on anticipatory bail, it would meet the ends of justice. The petitioners are ordered to be released on anticipatory bail in the event of their apprehension or arrest in O.R.No.40/2018-19 filed under Section 132 of G.S.T.Act, subject to conditions imposed - petition allowed.

Summary

Issues:
Petition for bail under Section 438 of Cr.P.C. for offence under Section 132 of G.S.T. Act.

Analysis:
1. Allegations and Submissions:
The petitioners were accused of obtaining invoices without actual goods delivery, allegedly evading tax under Section 132(1)(b) of G.S.T. Act. The senior counsel argued that paying tax based on invoices does not constitute an offence under Section 132. He emphasized that the Act aims to encourage taxpayers, not penalize them, and the offences are compoundable. The counsel assured the petitioners' compliance with court terms and conditions for anticipatory bail.

2. Opposing Arguments:
The standing counsel contended that issuing fake invoices without goods supply enables fraudulent input tax credit, causing economic loss. Referring to Section 69 of G.S.T. Act, he argued against releasing the petitioners, citing ongoing investigation and potential tampering with evidence or absconding if granted bail.

3. Judicial Review:
The judge carefully reviewed the submissions and perused the records. Sections 132, 138, and 139 of the G.S.T. Act were quoted for clarity on punishable offences, compounding provisions, and migration of taxpayers. Noting the maximum punishment of five years and fine, the judge considered whether the petitioners could be secured for investigation or trial.

4. Precedent and Decision:
Citing a similar case where accused were granted anticipatory bail, the judge found the petitioners entitled to the same relief. Consequently, the petitions were allowed, and the petitioners were ordered anticipatory bail with stringent conditions, including executing a personal bond, not leaving the country without court permission, cooperating in the investigation, refraining from tampering with evidence or criminal activities.

5. Conclusion:
The judgment granted anticipatory bail to the petitioners, emphasizing the importance of securing them for investigation or trial, based on the provisions of the G.S.T. Act and considering the nature of the alleged offences. The decision aligned with the objective of encouraging compliance with tax laws while ensuring accountability and adherence to legal procedures.