2022 (3) TMI 164 - HC - GST

Seeking grant of Bail - issuing invoices only without actual supply of goods with the motive to earn benefits by fraudulent means - offences under Section 132(1)(b)(i) of CGST Act and Section 20 (xv) of the IGST Act - HELD THAT - Though, there are serious allegations against the petitioners, but the same are required to be proved against them, in accordance with law, in order to secure their conviction, which is likely to take sometime. The offences, for which the complaint has been filed against the petitioners, attract punishment of imprisonment for a term which may extend to five years with fine. Petitioners are in custody since 21.7.2021. The investigation qua the petitioners has already been completed and, therefore, the complaint stands filed against them on 19.9.2021. Pretrial prolonged incarceration cannot be allowed as a matter of rule. No presumption of guilt can be attached against the petitioners as cardinal principle of criminal jurisprudence in our legal system is to presume innocence of accused till proved otherwise. The respondent has already made necessary recoveries and seizures of documents, including electronic records from the petitioners. It is not the case of the respondent that some more recoveries are to be affected from the petitioners. It is also not the case of the respondent, that petitioners had not cooperated with the investigation agency during investigation. The only apprehension of the respondent that in case of release of petitioners on bail the investigation underway in respect of the other persons may be hampered, can be taken care of by imposing appropriate and suitable conditions against the petitioners. Petitioners are ordered to be released on bail - Petition allowed.

Summary

Issues:
Grant of bail under Section 439 of Cr.P.C in a case involving offenses under Section 132(1)(b)(i) of CGST Act and Section 20 (xv) of IGST Act.

Analysis:
The petitioners were booked for offenses under the CGST Act and IGST Act by the Directorate General of Goods and Service Tax Intelligence, Chandigarh Zonal Unit. They were accused of facilitating firms in issuing invoices without actual supply of goods to earn benefits fraudulently, causing a loss of government revenue. The petitioners were arrested and have been in custody since then. The complaint against them is pending adjudication. The petitioners sought bail, claiming the allegations were false, evidence was fabricated, and their statements were obtained under duress. They argued they had roots in society, no likelihood of absconding, and were willing to cooperate with the investigating agency and court.

The respondent opposed the bail, stating the petitioners were involved in passing Input Tax Credit based on invoices from fictitious firms. Evidence showed their involvement in managing fictitious firms for passing inadmissible Input Tax Credit. They were accused of issuing goods-less GST invoices for scrap dealers, receiving commissions. The respondent argued that releasing the petitioners could influence witnesses and affect the investigation and revenue realization. The court noted the seriousness of the allegations but emphasized the need to prove them for conviction, which might take time. Prolonged pretrial incarceration was deemed inappropriate. The court highlighted the presumption of innocence until proven guilty and granted bail to the petitioners.

The court considered that necessary recoveries and seizures had been made, and there was no indication of non-cooperation by the petitioners. The only concern was potential interference with ongoing investigations, which could be addressed by imposing suitable conditions. The petitioners' permanent residence and family support indicated no risk of absconding. No prior criminal history was presented. Consequently, the court allowed the petitions and ordered the petitioners' release on bail, subject to specific conditions to ensure their availability for investigation and trial, non-tampering with evidence, and compliance with court directives.

This detailed analysis of the judgment highlights the legal proceedings, arguments presented by both parties, the court's considerations, and the final decision to grant bail to the petitioners in a case involving offenses under the CGST Act and IGST Act.