2020 (4) TMI 590 - HC - GST

Grant of Regular Bail - huge fraud of ₹ 74 crores - fake firms - evasion of GST input taxes - case of petitioner is that Himani Munjal, co-accused is granted bail - HELD THAT - The firms were misused for evading GST input taxes by the accused. Fake firms had been created in different States of the country. Although, co-accused Himani Munjal has been granted bail by the Apex Court, but it appears that she has been granted bail on account of the fact that she is a lady and has a young child to lookafter. Her custody period was also taken into consideration - Thus, the case of the petitioner can be said to be on different footing. No ground for grant of bail to him is made out - Bail application dismissed.

Summary

Issues Involved:
Petition for regular bail under Section 439 CrPC in a case involving huge fraud and creation of fake firms to evade GST input taxes.

Analysis:
The petitioner filed a bail petition seeking relief in a case registered under Sections 132(1)(b)(c)(d)(f)(i) and (i) of the Central Goods and Service Tax Act, 2017. The petitioner argued that since a co-accused who had a bail petition dismissed earlier was granted bail by the Apex Court, the petitioner should also be granted bail. The petitioner highlighted being in custody for about one and a half years, with a maximum potential sentence of five years. However, the Union of India opposed the bail petition, emphasizing the magnitude of the fraud involved. The investigation revealed that the petitioner and his co-accused had created 555 fake firms, leading to a fraud of approximately Rupees Seventy Four Crores. Further, it was disclosed that four fake firms discovered in January 2020 contributed to a fraud of around Rupees Six and a half Crores. The prosecution contended that the accused misused the fake firms to evade GST input taxes, issuing invoices worth over Rupees Seventy Four Crores.

The court noted that although the co-accused was granted bail by the Apex Court, the circumstances were different as she was a lady with childcare responsibilities. The court found that the seriousness of the allegations against the petitioner did not warrant granting bail. Considering the gravity of the offenses, especially the creation of fake firms leading to substantial tax evasion, the court dismissed the bail petition. The judgment highlighted the importance of the specific circumstances of each case in determining the eligibility for bail, emphasizing that the petitioner's case was distinct from that of the co-accused granted bail.