2021 (10) TMI 1022 - HC - GST

Seeking grant of Anticipatory Bail - availing input tax credit either using the invoices or bills or fraudulently availing such input tax credit without any invoice or bill - procedure for raid carried on, without following the procedure as contemplated under law - HELD THAT - The main aim of the Act is to simplify the taxation mechanism, to reduce the burden of taxes and clarify conformity of the tax payment. It also aims at consolidation of all indirect tax levies into a single tax and to remove cascading effect of the taxes. It is to achieve the motive of one nation one tax and to reduce tax evasion, to have corruption free tax administration, to reduce complications, encourage technically driven procedures and to provide ease of operation for e-commerce. If the citizens understand the importance of payment of tax, achieving the aims and objects of enacting the law would be easy, but on the other hand, if new ways and means are found to evade taxes, that will be a hurdle for the economic growth of the country. It amounts to loss of revenue and increase in inflation. It also have the impact on morale, increase in corruption and resulting in accumulation of black money and money laundering. So the impact on the nation as a whole is enormous. It is always considered that fiscal discipline is the base for strong economy that too for a fast developing country like India. Economic offences are always considered as serious threat to the economy of the country. It is nothing but economic terrorism. Therefore, such offences are considered as a class apart. The Hon ble Apex Court in Y.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION 2013 (5) TMI 896 - SUPREME COURT categorically held that economic offences constitute a class apart and needs to be visited with a different approach in the matter of bail. Under such circumstances, the strong suspicion of evasion of tax by the petitioner cannot be taken lightly. Only after a detailed investigation, the truth or otherwise in the allegations made could be found out. The conduct of the petitioner in not cooperating with the Investigating Officer is to be taken into consideration while deciding this petition. Initially the raid was held on few premises belonging to the petitioner on 28.11.2020 and the petitioner appeared before the Investigating Officer on few days, but thereafter, it is stated that he is avoiding to appear before the Investigating Officer. The delay in conducting investigation in these types of cases will have its own effects. The petitioner is not entitled for grant of anticipatory bail - the petition is dismissed.

Summary

Issues Involved:
1. Grant of anticipatory bail under Section 438 of Cr.P.C.
2. Allegations of tax evasion under CGST Act.
3. Legality and conduct of the raid by the respondent.
4. Petitioner's cooperation with the investigation.
5. Applicability of precedents in similar cases.

Detailed Analysis:

1. Grant of Anticipatory Bail under Section 438 of Cr.P.C.:
The petitioner sought anticipatory bail under Section 438 of Cr.P.C., fearing arrest by the Commissioner of Central Excise and GST for alleged offenses under Sections 69 and 132 of the CGST Act. The court noted that there is no statutory bar in the CGST Act for granting anticipatory bail but emphasized that economic offenses require a different approach due to their serious implications on the economy.

2. Allegations of Tax Evasion under CGST Act:
The respondent conducted a raid based on credible intelligence that the petitioner was involved in the illegal transportation of goods without raising invoices or generating e-way bills, thereby evading taxes. Incriminating documents were found during the raid, and the petitioner admitted to illegal activities in his statements recorded on multiple dates. The court highlighted the seriousness of economic offenses and the need for thorough investigation.

3. Legality and Conduct of the Raid by the Respondent:
The petitioner contended that the raid was politically motivated and conducted without following legal procedures, alleging harassment and illegal detention of his nephew. However, the court found that the respondent acted on credible information and within their legal powers under the CGST Act. The court dismissed the petitioner's claims of harassment, stating that the respondent was performing their official duties.

4. Petitioner's Cooperation with the Investigation:
The petitioner was accused of not cooperating with the investigation, avoiding summons, and not allowing the search of his residential premises. The court noted that the petitioner initially cooperated but later avoided further questioning. The court emphasized the importance of the petitioner’s cooperation for a thorough investigation and found his conduct in avoiding the investigation concerning.

5. Applicability of Precedents in Similar Cases:
The court considered several precedents, including decisions from the Supreme Court and various High Courts, which highlighted the gravity of economic offenses and the need for a different approach in granting bail. The court referenced cases like Sandeep Goyal Vs Union of India, Rajesh Arora Vs Union of India, and others, where bail was denied due to the serious nature of the offenses and the potential impact on the economy.

Conclusion:
The court concluded that the petitioner is not entitled to anticipatory bail due to the serious allegations of tax evasion, lack of cooperation with the investigation, and the need for a detailed investigation into the economic offenses. The petition was dismissed, emphasizing the importance of respecting the statutory powers of the investigating authorities under the CGST Act.