2021 (11) TMI 158 - HC - GST

Seeking grant of Regular Bail - cheating and forgery - fraudulent and bogus transactions - bogus firms - HELD THAT - The evidence collected during the course of investigation certainly points towards the complicity of the petitioners particularly the fact that bogus firms have been registered while furnishing e-mail ID and phone numbers of the accused. Still further in various of the firms it is Rajesh Mittal who is the authorized signatory. Further transfer of amounts in the personal bank account of the accused from the accounts of the firms would also nail the accused as regards their guilt. In the instant case the challan was presented about 2 years back and till date even the charges have not been framed. An amount of about 6 crores has already been recovered by way of compounding from the owners of the industrial units in Panipat who had allegedly benefited from the forged bills. The petitioners have been behind bars for a substantial period of about 2 years. Conclusion of trial is likely to consume time as the trial has not even commenced till date. Keeping in mind the fact that the trial is yet to commence no useful purpose would be served by further detaining the petitioners behind bars who have been in custody since last about 2 years - the petitions merit acceptance and are hereby accepted and the petitioners are ordered to be released on regular bail on their furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned. Petition allowed.

Summary

Issues Involved:
1. Involvement in fraudulent and bogus transactions causing loss to the state exchequer.
2. Double jeopardy claim by the accused.
3. Prosecution's evidence against the accused.
4. Duration of custody and delay in trial proceedings.
5. Consideration for granting bail.

Detailed Analysis:

1. Involvement in Fraudulent and Bogus Transactions:
The FIR was lodged based on allegations that the accused were involved in fraudulent and bogus transactions causing a substantial loss to the state exchequer. The accused allegedly floated bogus firms and conducted transactions with larger firms to facilitate GST evasion, resulting in a loss of about ?80 crores. The police apprehended the accused and recovered laptops, cheque books, fake rubber stamps, and files of bogus firms. Investigation revealed that the accused had registered 18 firms using details of individuals of limited means and issued fake bills to 421 industrial units in Panipat, which inflated their expenses and evaded GST.

2. Double Jeopardy Claim:
The defense argued that the accused were already being prosecuted under Section 132 of the GST Act and had been granted bail in that case, claiming double jeopardy. However, the prosecution countered that the current FIR involved allegations of cheating and forgery, which were separate from the GST Act complaint, and thus, the FIR could proceed independently without constituting double jeopardy.

3. Prosecution's Evidence Against the Accused:
The prosecution presented evidence showing the accused's involvement in the scam. Rajesh Mittal was identified as the kingpin, being the authorized signatory for several fake firms and using his contact details for their registration. Incriminating evidence, such as bogus stamps, was recovered from him. Transactions from the fake firms' accounts to the personal accounts of the accused further indicated their complicity. The prosecution also highlighted that approximately ?6 crores had been recovered from the industrial units that benefited from the bogus bills.

4. Duration of Custody and Delay in Trial Proceedings:
The defense highlighted that the accused had been in custody for about 2½ years and the charges had not been framed yet, despite the challan being presented two years ago. The prosecution did not dispute this fact. The court acknowledged the prolonged custody and the delay in trial commencement, noting that the trial was likely to take more time.

5. Consideration for Granting Bail:
Given the extended duration of custody and the fact that the trial had not commenced, the court found that no useful purpose would be served by further detaining the accused. The court ordered the release of the accused on regular bail, subject to furnishing bail bonds/surety bonds to the satisfaction of the trial court. The court also directed the trial court to expedite the proceedings and frame charges promptly, with the accused required to cooperate fully. The trial court was given the authority to cancel bail if the accused resorted to dilatory tactics.

Conclusion:
The petitions were accepted, and the accused were granted bail due to the prolonged custody and delay in trial proceedings. The court emphasized the need for the trial to proceed expeditiously and directed the accused to cooperate fully with the trial process.