2020 (11) TMI 323 - HC - GST

Grant of Bail - offence punishable under Sections 132(1)(b) and 132(1)(l) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner has been indicted in a heinous and serious offence, i.e., economic offence causing loss of ₹ 19 crores revenue to the Government Exchequer, as revealed from the materials produced and also his such alleged overt act contributed to frustrate the avowed object of bringing reform tax law brought by the Union of India in the shape of G.S.T. and Rourkela is stated to be an epicentre of such fraudulent activities in India which has spreaded to other parts of the Country, this Court is not inclined to review its earlier order rejecting the prayer for bail of the petitioner only on the ground that the petitioner remained in custody for some times more. The Court in seisin over the matter before release of the petitioner shall put such other terms and conditions as deemed just and proper to ensure his return to custody. Notwithstanding such interim release of the petitioner, the Court shall do well to take all effective steps to conclude the trial within six month hence and the complainant shall also take all such steps as desired by the court concerned for conclusion of the same within the time stipulated. Petition disposed off.

Summary

Issues: Bail application in a case involving economic offences under the Central Goods and Services Tax Act, 2017 during the Covid-19 pandemic.

Detailed Analysis:

Issue 1: Bail Application
The petitioner, a Director and Authorized Signatory of trading companies with GST registration, filed a bail application in a case pending before the Court of the S.D.J.M., Panposh, Rourkela. The offences alleged against him are punishable under Sections 132(1)(b) and 132(1)(l) of the Central Goods and Services Tax Act, 2017.

Issue 2: Prosecution and Allegations
The petitioner, along with others, was accused of issuing stage-managed invoices without actual movement of goods, leading to the wrongful claim of input tax credit amounting to a loss of ?19 Crores to the revenue. The search and raid conducted revealed discrepancies in the movement of goods, payments received, and fund siphoning activities by the petitioner and his associates.

Issue 3: Previous Bail Applications
The Court had previously rejected the petitioner's bail applications on merit, considering the gravity of the offence. The petitioner had been in custody for about two years since then, with the prosecution report already filed in the case.

Issue 4: Arguments for Bail
The petitioner contended that due to the impact of the Covid-19 pandemic on trial proceedings and the absence of a final prosecution report, he should be granted bail. It was argued that the delay in trial due to the pandemic warranted his release on bail.

Issue 5: Opposition to Bail
The opposing counsel argued against bail, citing the serious nature of the economic offence, the substantial loss caused to the revenue, and the previous rejection of bail based on merit. It was emphasized that the delay in trial was not attributable to the prosecution.

Issue 6: Court's Decision
After considering the arguments and the gravity of the offence, the Court acknowledged the petitioner's prolonged custody but highlighted the significant loss caused and the impact on tax laws. Despite maintaining the earlier rejection of bail, the Court granted interim bail for sixty days due to the extended custody period and the uncertain trial timeline caused by the pandemic. The Court directed the trial court to ensure the petitioner's surrender after the interim period, with a mandate to conclude the trial within six months.

Conclusion
The bail application was disposed of with the grant of interim bail for sixty days, subject to conditions for surrender and trial conclusion. The Court emphasized the need for expeditious trial proceedings and compliance by both parties to ensure timely resolution of the case.