2021 (6) TMI 676 - HC - GST

Seeking Bail - Passing of fake input tax credit - issued fake invoices/bills without receipt of goods - commission of economic offences - Offences under Sections 132(1)(b) 7 (c) of CGST Act, 2017 - HELD THAT - As the law stands, in such type of offences, while granting bail, the Court has to keep in mind, inter alia, the larger interest of the public and State. The accused is active in creation and operation of the nonexistent business entities for availing and passing of bogus ITC thereby defrauding the state exchequer. Considering the nature and gravity of the accusation, the nature of supporting evidence, availability of prima facie case against the petitioner, coupled with the fact that a huge amount of public money has been misappropriated and also the fact that further investigation of the case is under progress and taking into account the apprehension of the petitioner in tampering with the evidence, in the larger interest of society, the petitioner is not allowed to be released on bail - bail application dismissed.

Summary

Issues:
Petitioner's alleged involvement in economic offences under CGST Act, 2017 and the bail application based on lack of evidence and false implication.

Analysis:
The petitioner, a proprietor of a firm involved in a case of fraudulent ITC availed by non-existent firms, was accused of causing a significant loss to the state exchequer. The petitioner denied any connection with the main accused and argued lack of evidence against him. The State contended that the offence was part of an organized tax fraud syndicate, emphasizing the seriousness of economic offences that impact the economy. The Court acknowledged the severity of economic crimes, highlighting the need for a different approach to bail in such cases. Referring to legal precedents, the Court emphasized the importance of considering the nature of accusations, evidence, severity of punishment, and public interest while granting bail in economic offences.

The Court noted the ongoing investigation, the petitioner's inconsistent statements, and the risk of evidence tampering, leading to the decision not to grant bail. Citing legal principles, the Court highlighted the necessity of arrest in the investigative process to secure information and prevent hindrance to the investigation. Considering the gravity of the accusation, evidence, misappropriation of public funds, and ongoing investigation, the Court rejected the bail application to prevent potential interference with the case and safeguard the larger interest of society.

In conclusion, the Court rejected the bail application, emphasizing that the observations made were specific to the application and should not influence the trial court's proceedings. The parties were advised to access the order digitally due to COVID-19 restrictions.