2020 (11) TMI 829 - DSC - GST

Grant of Bail - allegation of availment of inadmissible input tax credit - bail is sought on the ground that arrest of the accused was arbitrary and illegal as there is no adjudication of any tax liability outstanding or contravening of GST Act - HELD THAT - The grant of bail requires striking a delicate balance between two conflicting interests, namely, on one hand. the liberty of an individual and on the other hand, the investigative rights of the prosecuting agency for the interest of the society. Although personal liberty and freedom of a person cannot be undermined, but at the same time, the legitimate rights of the investigative agency has to be taken due consideration of. The liberty of the individual is not absolute and same can be withdrawn if it is found to be creating an impediment in the rights of the prosecuting agency, The bifocal interests of justice to the individual and the rights of prosecution requires a fine balance to be maintained. In the instant case, the investigation is at a nascent stage and granting bail to accused at this stage would certainly undermine the rights of the prosecuting agency as tempering of evidence by accused which in this case would be documentary cannot be ruled out. Bail application is dismissed.

Summary

Issues:
1. Bail application moved on behalf of accused challenging the legality of arrest under section 69 of the Act.
2. Allegations of fraudulent ITC availed by the accused leading to tax evasion.
3. Accusations of non-cooperation with the department during the investigation.
4. Balance between individual liberty and investigative rights in the context of granting bail.

Analysis:
1. The accused, a proprietor of a trading business, was arrested by the Superintendent (Anti Evasion) under section 69 of the Act. The defense argued that the arrest was arbitrary and illegal, emphasizing the accused's societal roots, family, and health condition. They contended that no tax liability was outstanding, and the arrest disregarded a previous decision. The department countered, alleging the accused fraudulently availed ITC of a substantial amount resulting in tax evasion. The accused's non-cooperation and concealment of address were also highlighted. The court noted the delicate balance required in granting bail, considering both individual liberty and investigative rights. As the investigation was at a nascent stage and the possibility of tampering with evidence existed, the bail application was dismissed.

2. The department presented evidence of the accused's involvement in fraudulent ITC activities, leading to a significant tax evasion amount. Statements by the accused and another individual corroborated the fraudulent practices. The defense's reliance on specific judgments did not sway the court's decision. The department argued that granting bail would prejudice the case and defeat the purpose of custody. The court emphasized the need to maintain a balance between personal liberty and investigative rights, ultimately ruling against granting bail due to the potential risk of evidence tampering.

3. The accused's alleged non-cooperation with the department during the investigation was a point of contention. The defense claimed that the accused was fulfilling his duties under the GST Act, while the department asserted the accused ignored summons and hindered the investigation process. These factors were considered in the decision to deny bail, highlighting the importance of cooperation in legal proceedings.

4. The judgment underscored the importance of balancing individual liberty with the rights of the prosecuting agency, especially in the context of granting bail. The court acknowledged the fundamental rights of the accused but also recognized the investigative agency's legitimate interests. The decision to dismiss the bail application was based on the need to prevent potential tampering with evidence, considering the early stage of the investigation. The ruling aimed to uphold justice and maintain the integrity of the legal process.

This detailed analysis of the judgment provides a comprehensive overview of the issues raised, arguments presented by both parties, and the court's decision-making process, ensuring a thorough understanding of the legal complexities involved in the case.