2020 (6) TMI 113 - HC - GST

Grant of bail - issuance of fake invoices giving benefit to companies who availed benefit of of ITC - offence under Section 132(1)(b)(c)(f)(j) and (I) of the Central Goods and Service Tax Act, 2017 - HELD THAT - This Court notices that the complaint has already been filed with complete details before the Chief Metropolitan Magistrate (Economic Offences), Jaipur, who is ceased with the matter and the trial has commenced. The witnesses are in a huge number and the trial is likely to take time. No further documents are required to be produced apart from any other document, which may be required subsequently. The petitioners cannot be said to be required for any further investigation and no recovery is required to be effected against them and their account has also been seized - The recovery, which is required to be made as against the accused petitioners, is under the provisions of GST Act, which are not part of the criminal case. This Court also notices that the offence alleged against the accused petitioners is compoundable. However, no process for compounding the offence has been undertaken by either of the party. However, learned counsel submits that as the petitioners are behind bars, no proceeding for compounding the offence could be taken. Keeping in view that the petitioners are already in jail for 450 days and no further investigation or recovery is to be made for the purpose of the case, the petitioner is allowed to be released on bail subject to submitting a bail bond in the sum of ₹ 1,00,000/- along with one surety of the like amount along with certain conditions imposed. Bail Application allowed.

Summary

Issues:
Bail application under Section 439 CrPC for offence under CGST Act, 2017.

Analysis:
1. The bail applications were filed for offences under Section 132(1)(b)(c)(f)(j) and (I) of the Central Goods and Service Tax Act, 2017. The petitioners were in judicial custody for 450 days, and the investigation revealed their involvement in issuing invoices benefiting companies availing Input Tax Credit. The complaint listed 36 companies involved, with no action taken against their concerned persons.

2. The petitioner's counsel argued that no further investigation was needed, as the petitioners were in custody for a considerable time. The counsel highlighted the compoundable nature of the offence under the CGST Act, with a maximum punishment of five years. Due to the COVID-19 pandemic, the counsel requested bail with specific conditions, citing similar cases for precedent.

3. Conversely, the Revenue's counsel opposed bail, emphasizing the gravity of the economic offence committed by the petitioners. They detailed the evasion of CGST through fraudulent invoices benefiting numerous companies across different states. The Revenue Department had recovered a significant sum from customers who wrongly availed Input Tax Credit, and ongoing investigations were focused on other beneficiaries.

4. The court considered the arguments and referred to the judgment in Sanjay Chandra Vs. CBI, highlighting the discretion of the court in granting bail based on the facts of each case. The court noted that the trial had commenced, witnesses were numerous, and no further documents were required. The offence was compoundable, but no steps for compounding had been taken due to the petitioners' incarceration.

5. After evaluating the circumstances and legal precedents, the court decided to grant bail to the petitioners. The court emphasized that the petitioners had been in custody for an extended period, no further investigation or recovery was necessary for the case, and the offence was compoundable. Following the conditions set in the Sanjay Chandra case, the court ordered the release of the petitioners on bail with specific conditions to ensure compliance and prevent interference with the case or witnesses.