2019 (3) TMI 485 - HC - GST

Grant of regular bail - offence punishable under Section 132 (1) (a), (b) and (c) of Goods Services Tax Act, 2017 - issuance of fake invoices to get input tax credit - main accused have not been arrested so far - Held that - U/s. 69 of the GST Act, the Commissioner is having power to arrest if he has reasons to believe that a person has committed an offence specified in Clause (a) or (b) or (c) of sub-section (1) of Section 132 of the GST Act. Section 132(1) (a), (b) and (c) of GST Act define types of offences and according to which, whoever commits offence of supply of any goods or services without issue of any invoice or issues any invoice or bill without supply of goods or services of both or avails input tax credit using such invoice, shall be punished with imprisonment of term which may extend to 5 years and with fine, if the amount involved is more than ₹ 500 Lakhs. In view of the statement of the petitioner recorded u/s. 70 of the GST Act and the fact that the main accused have not been arrested so far, in the considered opinion of this Court, the petitioner is not entitled for grant of bail. Application dismissed.

Summary

Issues:
Application under Section 439 Cr.P.C. for bail in a case involving offences under GST Act and IPC.

Analysis:
The petitioner, arrested during an investigation under the GST Act, applied for bail under Section 439 Cr.P.C. The prosecution alleged tax evasion and fraud in GST payments, involving the creation of fake firms and issuance of fake invoices to claim input tax credit. The petitioner was accused of defrauding the Government Exchequer by evading GST to a significant amount. The petitioner's statement, admitting to not receiving or selling any goods and not submitting GST returns, was recorded during the investigation.

The petitioner's bail application was rejected by the Additional Sessions Judge, citing prima facie evidence of offences under the GST Act and IPC. The petitioner's counsel argued that he was falsely implicated, not being a registered dealer or involved in any transactions under the GST Act. It was contended that the petitioner's custody was unnecessary for further investigation, as he was willing to cooperate.

The prosecution opposed the bail application, presenting the petitioner's statement and other evidence. It was argued that the recorded statement could be used as evidence in the trial. The main accused in the case were not yet arrested, supporting the opposition to bail.

The Court considered the provisions of the GST Act, specifically Section 132(1)(a), (b), and (c), which define offences related to the supply of goods or services without proper documentation. Given the petitioner's statement and the non-arrest of the main accused, the Court concluded that bail was not warranted. Consequently, the bail application was dismissed, and the petitioner's request for bail was denied.