2020 (11) TMI 320 - HC - GST

Grant of Regular Bail - Irregular availment of input tax credit - offence under Section 132(1)(i) of Central Goods and Services Act, 2017 - HELD THAT - On perusal of the entire record would reveal that the allegation against the petitioner herein is illegal/ wrongful claim of 14 crores of Input Tax Credits without supply of goods - The petitioner is in jail from 23-09-2020. Admittedly, there is no explanation in the counter filed by the respondents with regard to stage and completion of investigation from 23-09-2020 - this Court is inclined to grant regular bail to the petitioner herein. Petition allowed.

Summary

Issues:
Grant of regular bail under Section 439 of Cr.P.C. for alleged offense under Section 132(1)(i) of Central Goods and Services Act, 2017.

Analysis:
The petitioner sought regular bail under Section 439 of Cr.P.C. as the sole Accused in a case registered by Directorate General of GST Intelligence for an offense under Section 132(1)(i) of the Central Goods and Services Act, 2017. The petitioner was accused of wrongly availing 14 crores of Input Tax Credit based on fake invoices without the supply of goods. The petitioner had paid a significant amount of GST and had also filed a petition to set aside the attachment of the bank account. The Division Bench had previously ordered interim suspension of the attachment on the condition of furnishing a bank guarantee. The petitioner had been in judicial custody for 28 days, during which only 2 witnesses were examined by the authorities.

The petitioner's counsel argued that the revenue interest was protected, and there was no explanation regarding the progress of the investigation since the petitioner's custody began. On the other hand, the Standing Counsel contended that the petitioner had not provided the correct residential address in the returns, raising concerns about potential interference in the investigation by the petitioner or their subordinates threatening witnesses. However, upon reviewing the records, the Court found that the petitioner's alleged illegal claim of Input Tax Credits was the main issue. Given the circumstances and lack of progress in the investigation, the Court decided to grant regular bail to the petitioner.

The Court granted bail to the petitioner with specific conditions, including furnishing a personal bond, reporting to the Investigation Officer daily, depositing the passport with the Court, not leaving the country without permission, cooperating with the Investigating Officer, refraining from threatening witnesses or interfering with the investigation, and allowing authorities to file for bail cancellation in case of any violations. The judgment closed any pending miscellaneous petitions related to the criminal petition.