2020 (12) TMI 265 - DSC - GST

Grant of Bail - Irregular CENVAT Credit - applicant submitted that passing of ineligible ITC and not of being the ultimate beneficiary of the alleged ineligible ITC and not of being the ultimate beneficiary of the alleged ineligible ITC and not of being the ultimate beneficiary of the alleged ineligible ITC - HELD THAT - In the given facts, accused is a young man apparently having clean antecedents as no evidence has been brought forth by the department to show that he has previously been involved/engaged in similar offences. Further, the conduct of the accused seems to be reasonable during investigation as it as not come from the department that he evaded arrest or remained defiant to the directions of the IO. The accused is in custody since 29.10.2020 and during this time the department has got ample opportunity to interrogate him. However, same was not done by the department which makes it clear that his custodial interrogation is no more required and it is pertinent to note that the time line for filing the charge sheet is drawing near, however, despite this no request has come from the department to seek his interrogation. The frail health of the mother of accused and his own bad health are relevant consideration in the backdrop of the fact that he never acted as an obstructionist during investigation. Being sole bread earner and provider of the family is also a valid consideration for seeking bail where it is found that on account of his incarceration the entire family is subject to hardship. Further, the investigating agency is having the possession of all the documentary evidence collected so far and all other relevant material which is in the form of stamps, cheque books, debit cards, digital signatures and other material like invoices which they can scrutinize and for such scrutiny which is time consuming the further detention without any justification seems to be unreasonable. At the same time, interest of the department can be safeguarded by putting conditions on the accused so that he should not come in the way of fair and proper investigation in future also. Bail granted subject to conditions imposed - application allowed.

Summary

Issues involved:
Bail application based on clean antecedents, health concerns, and lack of direct involvement in offense vs. Department's opposition citing masterminding multiple fraudulent firms, creating fake invoices, and defrauding government.

Detailed Analysis:

1. Bail Application Grounds:
The accused filed a bail application asserting clean antecedents, susceptibility to Covid-19, and his mother's poor health. It was argued that he was not the ultimate beneficiary of the alleged ineligible ITC and was unjustly arrested. The applicant denied being a shareholder, director, or authorized signatory of the firms in question. Additionally, it was highlighted that the department's apprehension of flight risk was baseless as no MBWs or LOC were obtained against him. The defense emphasized that the accused had not been interrogated since October 2020, indicating no need for custodial interrogation.

2. Department's Opposition:
The department opposed the bail application, alleging that the accused orchestrated the creation of multiple fraudulent firms, issued fake invoices, and passed on fraudulent ITC amounting to crores. It was revealed that the accused admitted to creating 31 fake firms, generating fake bills without supplying goods, and defrauding the government exchequer. Various incriminating items such as stamps, cheque books, and digital signatures were recovered from the accused, supporting the department's claims.

3. Judicial Considerations:
The court, while considering the bail application, referred to established legal principles regarding bail. It emphasized the need for judicious exercise of discretion, especially in serious offenses. The court considered factors such as the nature of the accusation, severity of punishment, likelihood of tampering with witnesses, and prima facie satisfaction of the charges. The court noted the accused's clean antecedents, cooperation during the investigation, and the lack of evidence of previous similar offenses.

4. Decision and Conditions:
After weighing the arguments, the court granted bail to the accused, subject to specific conditions. The accused was required to furnish a personal bond and surety, join the investigation as directed, refrain from tampering with evidence or influencing witnesses, not leave the country without court permission, avoid similar offenses in the future, and appear in court for all hearings. The court highlighted the importance of balancing the accused's rights with the interest of fair and proper investigation.

In conclusion, the judgment analyzed the bail application in light of the accused's grounds and the department's opposition, ultimately granting bail with stringent conditions to safeguard the investigation's integrity and ensure the accused's compliance with legal obligations.