2021 (1) TMI 215 - DSC - GST

Grant of Bail - Fraudulent Input Tax Credit - allegation that applicant/accused knowingly participated in receipt of only paper invoices to the tune of ₹ 150 crores without any movement of goods and has fraudulently availed/passed input tax credit of approximately ₹ 7 crores to Government exchequer - HELD THAT - The economic offences are required to be treated as a separate class and bail cannot be granted as a matter of routine - Applicant/accused is Masters in Business Administration. He is reported to be the sole proprietor of M/s Sri Siddhivinayak Ventures and reportedly raised taxable invoices to the tune of ₹ 150 crores without any movement of goods. During the course of investigation, it was revealed that input tax credit of approximately ₹ 7 crores has been fraudulently availed/passed by M/s Sri Siddhivinayak Ventures. Considering the seriousness of allegations, enormity of charge and the fact that investigation is at crucial stage, the applicant/accused cannot be released on bail - bail application dismissed.

Summary

Issues:
Bail application for accused involved in GST fraud.

Analysis:
The accused, a proprietor of a firm, applied for bail, claiming innocence and stating that he was falsely implicated in a case where his friend, using the firm's PAN, committed GST fraud. The accused argued that he was not involved in any transactions, was not a registered dealer, and did not render any services. He highlighted his educational background and family circumstances, seeking bail.

The Special Public Prosecutor opposed the bail, alleging that the accused knowingly participated in fraudulent activities, including availing input tax credit without actual movement of goods, causing a significant loss to the government exchequer. The prosecutor contended that due to the seriousness of the charges, the accused should not be granted bail.

The judge, after considering the arguments from both sides and examining the material on record, referred to legal precedents emphasizing the gravity of economic offenses. Citing the need for a different approach in economic offense cases, the judge noted the deep-rooted conspiracies and significant public fund losses involved. The judge highlighted factors to be considered while granting bail, such as the nature of accusations, evidence, severity of punishment, accused's character, and public interest.

Given the magnitude of the allegations, the judge found the charges serious, the investigation crucial, and the accused's involvement significant. Consequently, the judge denied bail, stating that the application lacked merit. The judge dismissed the bail application, emphasizing the seriousness of economic offenses and the need for a distinct treatment in such cases.

In conclusion, the judge rejected the bail application, considering the severity of the accusations, the substantial amount involved in the fraud, and the critical stage of the investigation. The order was disposed of, with directions for immediate uploading on the court's website.