2020 (8) TMI 212 - HC - GST

Grant of Interim Bail - Input Tax Credit availed on the basis of invoices without there being actual sale of goods - HELD THAT - Keeping in view the custody period and also the fact that the maximum sentence provided for the offence in question is 5 years and that the vires of the Act is itself under challenge, the petition merits acceptance and is hereby accepted. The interim directions dated 20.7.2020 are hereby made absolute on the same terms and conditions.

Summary

Issues:
Grant of regular bail in a case under Punjab Goods and Service Tax Act, 2017.

Analysis:
The petitioner sought regular bail in a case under Section 69/132(1)(b)(c) of the Punjab Goods and Service Tax Act, 2017. The allegations were related to availing Input Tax Credit (ITC) amounting to approximately ?10.81 crores based on invoices without actual sale of goods. The vires of the Act had been challenged in another case pending before the Hon'ble Division Bench of the Court. The petitioner had already been granted interim bail due to this challenge. The petitioner had been in custody for about 10 months, and considering that the maximum sentence for the offense was 5 years and the trial proceedings were at a standstill, the petitioner's counsel argued against further detention. The State counsel, however, opposed bail due to the significant amount involved in the alleged scam, exceeding ?10 crores.

The Court acknowledged the custody period, the maximum sentence, and the challenge to the Act's vires. After considering the arguments, the Court found merit in the petitioner's case and granted regular bail, making the interim directions absolute. The decision was based on the custody period, the potential sentence, and the ongoing challenge to the Act's validity, leading to the acceptance of the petition for bail.