2021 (2) TMI 1045 - HC - GST

Seeking grant of bail - Input tax credit - bogus firms - offence under Sections 132(1)(c) of the Central Goods and Services Tax Act, 2017 - HELD THAT - This bail application is allowed and it is directed that accused-petitioner shall be released on bail provided he furnishes a personal bond in the sum of ₹ 1,00,000/- together with two sureties in the sum of ₹ 50,000/- each to the satisfaction of the trial Court with the stipulation that he shall appear before that Court and any Court to which the matter be transferred, on all subsequent dates of hearing and as and when called upon to do so. Bail application allowed.

Summary

Issues involved:
Bail application under Section 439 Cr.P.C. for offence under Sections 132(1)(c) of the Central Goods and Services Tax Act, 2017.

Analysis:
The petitioner filed a bail application under Section 439 Cr.P.C. in response to F.I.R. No.IV (06) 248/ AE/ALWAR/2020 registered for an offence under Sections 132(1)(c) of the Central Goods and Services Tax Act, 2017. The counsel for the petitioner argued discrepancies in the complaint regarding the wrongful claim of input tax credit, stating an increase from ?5.27 Crore to ?5.88 Crore. It was emphasized that the petitioner was not involved in the management of the alleged bogus firms, some of which still exist on the Department's portal. The defense highlighted actual goods movement supported by toll naka receipts and e-way bills, suggesting a reduction in input tax credit by approximately three crores. Additionally, it was argued that since the offence pertained to a wrongful claim of input tax credit below ?5 crore, it was bailable with a maximum sentence of five years, and the petitioner had been in custody since November 2020.

The Union of India vehemently opposed the bail application, alleging the creation of fake firms to claim input tax credit, with investigations revealing their fraudulent nature and the untraceable status of the firms' proprietors and owners. The prosecution stressed that tax evasion negatively impacts the nation's economy and urged the court not to be lenient in granting bail to such offenders. After considering the contentions from both sides, the court deemed it appropriate to allow the bail application. Consequently, the bail application was granted with the condition that the accused-petitioner would be released upon furnishing a personal bond of ?1,00,000 and two sureties of ?50,000 each to the satisfaction of the trial court. The accused was also directed to appear before the court and any subsequent hearing dates as required.