2021 (8) TMI 1172 - HC - GST

Seeking grant of Bail - availment of fraudulent ITC - Offence u/s 132 (1) (b) C.G.S.T. Act - HELD THAT - On going through nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence, prima facie satisfaction of the Court in support of the charge, reformative theory of punishment, and larger mandate of the Article 21 of the Constitution of India, the dictum of Apex Court in the case of DATARAM SINGH VERSUS STATE OF UTTAR PRADESH AND ANR. 2018 (2) TMI 410 - SUPREME COURT and without expressing any opinion on the merit of the case, this is found to be a fit case for bail. The application is allowed.

Summary

Issues: Bail application in a GST fraud case

Analysis:
The bail application was filed on behalf of the applicant seeking release during the trial in a case under Section 132(1)(b) of the CGST Act. The applicant, an employee of a trading firm, was implicated in a case involving fraudulent inward Input Tax Credit (ITC) amounting to crores of rupees. The main accused, the proprietor of the firm, was not arrested or charged in the case. The applicant was accused of aiding the main beneficiary in the fraudulent activity. The Additional Director General of DGGI was alleged to have granted authorization without due diligence. No proceedings under Section 74 or order under Section 83 of the CGST Act had been initiated against the firm. The applicant had no criminal history and had been in custody for over seven months.

The opposing parties argued against granting bail but did not dispute the facts presented. The court considered the severity of punishment, the nature of the accusation, supporting evidence, and the reformative theory of punishment. Citing the Apex Court's judgment in Dataram Singh v. State of U.P., the court found it to be a case suitable for bail, without expressing an opinion on the case's merits. The bail was granted to the applicant, subject to conditions.

The conditions of bail included attending trial proceedings, not tampering with witnesses, and refraining from illegal activities. The sureties provided by the applicant were to be verified before release. Breach of any bail conditions would result in cancellation of bail and imprisonment. The court clarified that the observations in the order were limited to the bail application and did not reflect on the case's ultimate merits. Breach of bail conditions was specified as grounds for cancellation. The parties were instructed to file a computer-generated copy of the order from the official website of the High Court Allahabad, duly attested by their counsel. Verification of the order's authenticity was required from the official website, with a written declaration of such verification.