2021 (2) TMI 243 - HC - GST

Grant of Anticipatory Bail - fake invoices through various firms, floated/ managed either directly by them or by putting convenient people to manage their affairs, without any corresponding supply of goods and services - offence punishable under Section 132 (1)(i) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner has been in custody now for 56 days. The maximum sentence provided for the offence alleged against the petitioner is imprisonment for a period of five years, therefore the learned Chief Metropolitan Magistrate is required to take congnizance on the complaint is required to be filed in 60 days. On a query put to the Senior Investigating Officer of the respondent Mr. Neeraj, as to whether the respondent is likely to file a complaint within four days, he very fairly states that since around 100 hard-drives have been recovered from the offices of the petitioner and his brother, the same are required to be analyzed and a detailed investigation is required to be carried out to find out the number of fake firms, the complete transactions carried out as also the number of beneficiaries of the fake bills and invoices generated by the petitioner and the co-accused. He further states that a comprehensive complaint cannot possibility be filed in four days - It is thus evident that the respondent does not propose to file a complaint within 60 days and after 4 days the petitioner would in any case be entitled to the default bail as a matter of right. The petitioner is directed to be released on bail on his furnishing a personal bond in the sum of ₹1 lakh with one surety bond of the like amount subject to the satisfaction of the learned CMM/Duty Magistrate concerned, further subject to the condition that the petitioner will not leave the country without the prior permission of the Court concerned - Application allowed.

Summary

Issues Involved:
Petition for regular bail under Section 132(1)(i) of the Central Goods and Services Tax Act, 2017 - Arrest Memo dated 9th December, 2020 - Allegations of providing fake invoices through multiple firms - Accused's involvement in fake invoice racket - Recovery of incriminating documents - Failure to join investigation - Bail conditions.

Analysis:

1. Bail Application: The petitioner sought regular bail following the Arrest Memo dated 9th December, 2020, for an offense under Section 132(1)(i) of the CGST Act, 2017. The petitioner had previously filed an anticipatory bail application before the Sessions Judge, stating ongoing investigation from the petitioner's end.

2. Allegations and Investigation: The respondent alleged that the petitioner and his brother were involved in providing fake invoices through numerous firms without actual supply of goods or services. Searches conducted at the brother's offices and residence revealed incriminating documents, but he repeatedly failed to join investigations. The petitioner, too, failed to join until filing the anticipatory bail.

3. Modus Operandi: The detailed status report highlighted the modus operandi of the petitioners. Despite the petitioner claiming ignorance of his brother's activities, the brother's statement indicated the petitioner's involvement in the fake invoice racket. The petitioner was found in possession of foreign origin SIMs used for illegal communications regarding generating fake E-way bills.

4. End Users and Recovery: Two end users, Larson & Turbo Limited and Rama Krisha Electro Components Private Limited, who benefited from the fake invoices, voluntarily deposited significant amounts after the proceedings began. The recovery of numerous hard drives necessitated further analysis to determine the extent of the fraudulent activities.

5. Bail Decision: The petitioner had been in custody for 56 days, nearing the maximum sentence duration of five years. The Court noted that the respondent was unlikely to file a complaint within the required 60 days, entitling the petitioner to default bail. Consequently, the petitioner was directed to be released on bail upon furnishing necessary bonds and complying with specified conditions.

6. Conclusion: The petition for regular bail was disposed of, with the order to be uploaded on the Court's website. The judgment highlighted the intricacies of the case, including the complex investigation, the involvement of multiple parties, and the conditions imposed for the petitioner's release on bail.