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2022 (1) TMI 854 - HC - GSTSeeking grant of Bail - illegal availment of input tax credits - compoundable offence or not - offence punishable under Section 132 (1) (b) (c) of the Act of 2017 - HELD THAT - The manner in which crime is committed reveals that applicants with cool mind and deliberate design with an eye on personal profit regardless of consequence of community affecting economy of the country as whole have committed crime in question. Act of applicants is an attempt to destroy system of the Government of collecting taxes under GST scheme. Economic offences constitute a class apart and even bail matters are required to be decided with different approach as it involves huge loss of public funds. True it is that offence committed under Section 132 (1) of the Act of 2017 is made compoundable under Section 138 of the Act of 2017 subject to deposit of amount assessed. Present is not the case where applicants being businessmen in the course of their business inadvertently committed any offence as defined under Section 132 (1) (b) (c) of the Act of 2017. From the documents collected by non-applicant Department during investigation and contents of complaint filed by non-applicant it is apparent that applicants with intention to commit economic crime created fictitious firms in a planned manner. This is not a fit case where applicants should be enlarged on regular bail more so when it is stand of non applicant Department that investigation is in furtherance at different zones of the Department - bail application dismissed.
Issues:
1. Application for regular bail under Section 439 of the Code of Criminal Procedure, 1973 for offences under the GST Act. 2. Allegations of creating fake firms, availing illegal benefits, and causing loss to the government exchequer. 3. Arguments regarding the legality of arrests, sufficiency of evidence, and abuse of process of law. 4. Opposing arguments highlighting the seriousness of economic offences and the need for continued investigation. 5. Interpretation of evidence, nature of accusations, and considerations for granting bail in economic offence cases. Detailed Analysis: 1. The applicants sought regular bail under Section 439 of the CrPC due to their custody since 25.1.2021 for offences under Section 132 (1) (b) (c) of the GST Act. The non-applicant Department alleged that the applicants created forged firms across multiple states, availed illegal benefits, and caused a substantial loss to the government exchequer. The initial bail application was rejected by the lower court on 13.8.2021. 2. The applicants' counsel argued that the arrests were illegal, the evidence was insufficient, and the non-applicant Department's procedures were an abuse of the court process. They contended that the allegations lacked substantiation, other involved firms were not accused, and the loss amount was unsupported. The counsel emphasized that the offence was compoundable and the applicants had been in custody for over 11 months without the need for further interrogation. 3. In contrast, the non-applicant Department contended that the applicants had created fake firms, engaged in fictitious transactions, and admitted to generating fake input tax credits. They highlighted the ongoing investigations, the complexity of the case, and the potential influence on witnesses if the applicants were granted bail. The Department relied on precedents to support their opposition to bail. 4. The court observed that the applicants had intentionally created fake firms, used false identities, and engaged in transactions without actual goods or services. The lack of evidence establishing the existence of the firms created by the applicants, coupled with the deliberate planning of the economic crime, led the court to deny bail. The court emphasized the severity of economic offences and the need for a different approach to bail in such cases. 5. Referring to Supreme Court precedents, the court highlighted the seriousness of economic offences, the impact on the country's economy, and the need for stringent considerations in bail matters involving economic crimes. The court concluded that the deliberate planning and execution of the economic crime by the applicants warranted denial of bail, especially considering the ongoing investigations and the gravity of the offences. In conclusion, the court rejected the bail application, citing the deliberate nature of the economic offences, the ongoing investigations, and the potential threat to the financial health of the country posed by the accused's actions.
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