2021 (12) TMI 1184 - HC - GST

Seeking grant of bail - only allegation against the petitioner is that the principal accused used the address of the premises where the business of the petitioner is situated - petitioner submits that the petitioner does not have any connection with M/s. Balaji Enterprises - HELD THAT - On consideration of the submissions advanced by the learned counsel for the respective parties coupled with the period of custody undergone by the petitioner which is since 19.01.2021, the petitioner is directed to be released on bail on furnishing bail bond of ₹ 10,000/- with two sureties of the like amount each, to the satisfaction of learned Chief Judicial Magistrate, Chaibasa. Bail granted - application allowed.

Summary

Issues: Allegations of fraudulent activities causing loss to the State exchequer, Bail application

Allegations of Fraudulent Activities:
The judgment pertains to a case where the petitioner, an accused in connection with a specific case, was alleged to have been involved in fraudulent activities causing a substantial loss to the State exchequer. The allegations included discrepancies in the registration details of a business entity, subletting of rented premises, and unauthorized registration for VAT and GST. The prosecution argued that the petitioner, along with other accused persons, orchestrated a scheme resulting in a financial loss amounting to ?1,09,56,094. The defense, led by Mr. Tripathi, contended that the petitioner had no association with the said business entity and operated a separate business under a different name. Reference was made to the Jharkhand Goods and Services Tax Act, 2017, emphasizing non-compliance with specific provisions.

Legal Arguments and Precedents:
The defense relied on legal provisions under Sections 72 and 73 of the Jharkhand Goods and Services Tax Act, 2017, to argue that the prescribed mandates were not adhered to in the case. Additionally, a judgment from the Madras High Court was cited to emphasize that punitive actions under Section 132 of the Act should only follow a determination of the demand due from the assessee. The defense highlighted a letter from the Sales Tax Department where the petitioner's name was not initially implicated, asserting that the petitioner was not the ultimate beneficiary of the alleged fraudulent activities. The petitioner's custody since a specific date was also brought to the court's attention.

Opposition and Counterarguments:
On the other hand, the State vehemently opposed the petitioner's bail application, alleging that the petitioner was the mastermind behind the fraudulent exercise. The State's counsel, Mr. Pati, presented a comparative chart outlining the petitioner's purported modus operandi in causing financial losses to the State exchequer. It was revealed that the petitioner was also involved in another case related to a different business entity sharing the same office premises. The State contended that due process under Sections 72 and 73 of the Act had been duly followed, including the issuance of show cause notices and the passing of a final adjudication order.

Judicial Decision:
After considering the arguments from both sides and taking into account the period of custody already undergone by the petitioner, the Hon'ble Court directed the release of the petitioner on bail upon furnishing a bail bond of ?10,000 with two sureties of the same amount each. The bail order was issued in connection with the specific case under Chaibasa Sadar P.S. Case No. 21 of 2019.