2021 (3) TMI 1087 - HC - GST

Grant of Regular Bail - availment of fake Input Tax Credit - fake/bogus firms - clubbing of firms - HELD THAT - It is found that main allegations against the petitioner are regarding availment of fake Input Tax Credit (ITC) Limit of 04 firms and on clubbing of the same, the amount as calculated by the respondent is approximately ₹ 18 crores, however, considering the fact that the custody of the petitioner is less than 03 months, it is deemed appropriate to grant the concession of regular bail to the petitioner, at this stage. Petition dismissed.

Summary

Issues:
Grant of regular bail under Section 439 of Cr.P.C. for offence under Section 132(1)(b) and 132(1)(c) of the CGST, 2017.

Analysis:

1. Allegations against the Petitioner:
The petitioner sought bail for the offence under Section 132(1)(b) and 132(1)(c) of the CGST, 2017. The petitioner's senior counsel argued that the accounts were verified multiple times with nothing suspicious found. The petitioner was detained under Section 69 of the Act and a remand application was filed. The counsel contended that the procedure under Section 67(10) of the CGST, 2017 was violated during the surprise visit, and proper procedure was not followed. The petitioner's innocence until proven guilty was emphasized, and it was argued that no fake invoices were involved.

2. Legal Arguments for Bail:
The petitioner's counsel cited previous judgments challenging the constitutional authority of Sections 69 and 132 of the CGST, 2017. The counsel highlighted the importance of considering innocence until proven guilty and the potential deprivation of personal life if bail is denied. Precedents where bail was granted in similar circumstances were also presented.

3. Respondent's Opposition:
The respondent opposed bail, stating that a complaint had been filed against the petitioner based on witness statements and documents showing receipt of invoices without actual supply of goods from fake firms. The respondent argued that the petitioner operated multiple firms filing fake ITC worth a substantial amount. The statements of witnesses and investigation revealed the petitioner's involvement in day-to-day business operations of the firms.

4. Court's Decision:
After reviewing arguments, documents, and judgments, the Court noted the main allegations of fake ITC amounting to approximately ?18 crores against the petitioner. Despite the custody being less than three months, the Court deemed it inappropriate to grant regular bail at that stage and dismissed the petition.

This detailed analysis covers the issues raised in the petition for regular bail under Section 439 of the Cr.P.C. for offences under Section 132(1)(b) and 132(1)(c) of the CGST, 2017, outlining the arguments presented by both parties and the ultimate decision of the Court.