2021 (5) TMI 226 - DSC - GST

Bail application - issuance of bogus invoices without actually transferring the physical goods - prosecution under section 132(5) of CGST Act, 2017 - HELD THAT - This court is of considered view that the present accused does not deserves to be released on bail. This is a economic fraud going to the root of the economy as this Court does not see any justifiable ground for grant of bail. It is settled preposition of law that economic offences in itself are considered to be gravest offence against the society at large and hence are required to be treated differently in the matter of bail. It seems that the entire community would aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. Further if a murder committed in the heat of moment upon passing being aroused, the economic offence is supposed to be committed with cool calculation and deliberately with an eye on personal profit regardless of the consequence of the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. The bail application moved by applicant/accused Anil Kumar Jain stands dismissed - Papers be tagged with the main case file.

Issues Involved:
1. Legality of the arrest of the applicant/accused.
2. Admissibility of the applicant/accused's statement recorded after arrest.
3. Jurisdictional validity of the arrest.
4. Allegations of wrongful Input Tax Credit (ITC) claims and issuance of fake invoices.
5. Applicability of Section 132(5) of the CGST Act, 2017.
6. Health condition of the applicant/accused and its impact on bail decision.
7. Previous bail applications and their outcomes.
8. Economic impact of the alleged offense and its consideration in bail matters.

Detailed Analysis:

1. Legality of the Arrest:
The applicant/accused was arrested by the Directorate General of GST Intelligence, Gurugram Zonal Unit (DGGI-GZU) on 18.07.2019 at 06:10 A.M. from his residential premises in New Delhi. The defense argued that the arrest was illegal as it was conducted outside the jurisdiction without informing the local jurisdictional police or the DGGI-DZU officers. This, according to the defense, made the arrest beyond the scope of the complainant's duty.

2. Admissibility of the Statement:
The defense contended that the statement of the applicant/accused, recorded after his arrest on 18.07.2019, is inadmissible under Article 20(3) of the Constitution of India, which protects against self-incrimination.

3. Jurisdictional Validity:
It was argued that the arrest memo violated set laws and rules as there were no witnesses to the arrest, and the complainant admitted that the companies involved were not within the territorial jurisdiction of the Court. The defense cited a previous case (COMI/610/2019) where bail was granted on grounds of lack of jurisdiction.

4. Allegations of Wrongful ITC Claims and Fake Invoices:
The applicant/accused was alleged to be the mastermind behind issuing bogus invoices and availing wrongful ITC to the tune of ?85.84 crores while paying ?87.78 crores. The defense argued that the applicant had paid excess tax, making the case bailable as the threshold for non-bailable offenses under the Act is ?5 crores. The defense also claimed that the allegations were false and unsupported by documentary evidence, which showed that the applicant had paid excess ITC.

5. Applicability of Section 132(5) of the CGST Act, 2017:
The defense argued that the department had not specified which clause of Section 132(5) was violated. The defense maintained that the applicant had not wrongfully claimed ITC or issued fake invoices, and the department had not demonstrated how the alleged wrongful ITC was claimed.

6. Health Condition of the Applicant/Accused:
The defense highlighted that the applicant/accused had undergone surgery for his intestines and kidneys and required constant medical observation. This was presented as a ground for granting bail.

7. Previous Bail Applications:
The defense did not disclose the number of previously declined bail applications by the Court and the Sessions Court. The prosecution noted that this was the applicant's 4th bail application in the Sessions Court, and previous applications were dismissed, including one withdrawn from the Punjab and Haryana High Court.

8. Economic Impact of the Alleged Offense:
The Court emphasized that economic offenses are considered grave as they affect the economy and the community at large. The Court cited the "State of Gujarat Vs. Mohanlal Jitamalji Porwal" case, stating that economic offenses are committed with deliberate calculation for personal profit, impacting the national economy and public trust.

Judgment:
After considering the arguments, the Court concluded that the applicant/accused does not deserve to be released on bail. The Court highlighted the gravity of economic offenses and their impact on society, stating that such offenses need to be treated differently in bail matters. The bail application was dismissed without commenting on the merits of the case.

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