2021 (2) TMI 139 - HC - GST

Seeking grant of Bail - allegation is that the permanent place of business, declared by the aforesaid entity, is found to be incorrect - offence punishable under Section 132(1)(i) of the Central Goods and Services Tax Act, 2017 - learned counsel for the respondent, as to on what basis the applicant came to be arrested, he submits that the address, which the applicant had declared, found to be non-functional, and he had wrongfully availed input tax credit. However, learned counsel does not argue with regard to apprehension that the applicant may tamper with the evidence or may not be available for trial. HELD THAT - Considering the punishment provided for the alleged offence, so also considering the fact that the offence is triable by the Court of Magistrate, and that the applicant is in jail since more than one month, this Court is of the opinion that by imposing suitable conditions, he can be released on bail. The Criminal Application is allowed - applicant Gaurav s/o Ranjit Gupta, be released on bail on his furnishing PR bond in the sum of ₹ 1,00,000/- with one local surety in the like amount - applicant to deposit bank guarantee of ₹ 50,00,000/- with the authority concerned within a period of four weeks from today.

Summary

Issues:
Application for grant of bail in a case involving an offence under Section 132(1)(i) of the Central Goods and Services Tax Act, 2017.

Analysis:
The applicant, a Director of a public limited company, was arrested for allegedly availing input tax credit without a physical presence in the State of Maharashtra. The arrest was based on the discrepancy in the declared business address and the actual functional address of the entity, as well as the use of fake documents on the GST portal. The applicant sought bail, arguing that the liability for tax payment does not arise until adjudication under Section 74 of the Act of 2017. The Court considered the seriousness of the offence, punishable by imprisonment up to five years and a fine, but also noted that the offence is triable by a Magistrate. The applicant expressed readiness to cooperate with the investigation. The respondent did not contest the possibility of tampering with evidence or non-availability for trial.

The Court, after evaluating the punishment for the alleged offence and the fact that the applicant had been in jail for over a month, granted bail with specific conditions. The applicant was directed to furnish a personal recognizance bond and a bank guarantee, provide contact details, remain available for investigation, not leave the country without permission, and refrain from tampering with evidence. The Court clarified that the bail order does not affect the trial proceedings.

In conclusion, the High Court of Bombay granted bail to the applicant, emphasizing the importance of complying with the imposed conditions to ensure cooperation with the investigation and trial process. The judgment highlighted the seriousness of the offence under the GST Act while balancing the applicant's right to liberty pending trial.