2020 (5) TMI 170 - HC - GST

Grant of Bail - illegal availment of input tax credit - fictitious firms - HELD THAT - In the instant case, it appears that the case would require thorough investigation with the possibility of addition of more accused to the array; inasmuch as, as many as 406 summonses have been issued and 92 beneficiary firms are under scrutiny - Complaint might have been filed against the petitioner in compliance with Section 167 of Cr.P.C, that would however not preclude the investigating agency to investigate into what could be the huge racket and under such circumstances placing the petitioner out of jail would be potential threat to the investigation; inasmuch as, the manipulation of the evidence at the hands of the petitioner cannot be ruled out. The loss of ₹ 60 Crores to the public exchequer so far cannot be considered as a small amount. It may be true that as on date the person conniving with the petitioner might not have been arraigned as accused or arrested; but then it would be pre-mature to make any further comment on the said aspect as investigation is under way and it is at crucial stage. Bail cannot be granted - application dismissed.

Summary

Issues:
Bail application under Section 439 of Cr.P.C for offence under Section 132(1)(b)(c) of CGST Act, 2017.

Analysis:
1. The applicant sought bail for an offence under Section 132 of CGST Act, accused of obtaining tax credit through fictitious firms. The maximum punishment is 5 years' imprisonment.
2. Grounds for bail included the quantum of sentence, recovery of funds, non-arrest of co-accused, and the petitioner's health issues. Alleged hasty complaint aimed to deprive default bail benefit.
3. The defense argued no assessment notice was issued, relying on legal precedent. The prosecution opposed bail due to the gravity of the offense involving fake transactions, tax evasion, and multiple beneficiaries.
4. Prosecution highlighted the magnitude of the economic crime, recovery of incriminating material, and ongoing investigation involving numerous firms and co-accused.
5. The court considered precedents and noted the seriousness of the case, potential tampering of evidence, and substantial loss to the public exchequer.
6. Due to the extensive investigation, potential addition of more accused, and the threat to evidence integrity, bail was denied to prevent hindrance to the ongoing probe.
7. The court emphasized the pre-meditated nature of the offense, the significant loss incurred, and the risk of continued criminal activities if bail was granted.
8. The absence of co-accused's arrest did not affect the decision, as the investigation was at a crucial stage.
9. The court dismissed the bail application, emphasizing the lack of evidence regarding the petitioner's serious ill-health, with the provision for necessary medical assistance if required.