2022 (3) TMI 392 - DSC - GST

Seeking grant of Bail - Ineligible/fake Input Tax Credit - conspiracy with the firms for the purpose of availing and passing on ineligible ITC - different transactions taking place without any actual supply of goods/services - HELD THAT - In this case, Ld. SPP for CGST has not disputed the grant of bail to the other co-accused as argued by Ld. Defence counsel. The involvement of accused has not been shown directly in the firms, who were involved in the availment of fraudulent ITC claims. Moreover, the person who availed the entire ITC is already on anticipatory bail. Accused is already in custody since 09.02.2022, his statement u/s 70 already been recorded, investigation qua him is no more pending against him. Co-accused who were arrested and having the direct involvement in commission of the offence already been enlarged on bail. No purpose would be served to keep the accused behind bar, accordingly accused Mukesh Gupta is admitted on bail on furnishing personal bond in the sum of ₹ 5,00,000/- alongwith one surety in the like amount to the satisfaction of Ld. MM/Duty MM concerned subject to satisfaction of conditions imposed - application allowed.

Summary

Issues: Allegations of fraudulent Input Tax Credit (ITC) availing and passing, conspiracy with firms, involvement in fake billing, failure to join investigation, bail plea based on false implication, parity with other accused, evidence based on whats app chats and statements, grant of bail to co-accused, principles of bail grant.

The judgment delivered by the District/Sessions Court at Patiala House Court involved allegations against the accused regarding the involvement of multiple firms in fraudulently availing and passing on ineligible/fake Input Tax Credit (ITC) amounting to ?72 crores. It was alleged that the accused conspired with these firms to create transactions without actual supply of goods/services to avail ITC. The investigation revealed fund transfers to shell companies and individuals related to the accused, indicating his role in managing the affairs and facilitating the commission of the offence.

The defense counsel argued for bail, claiming the accused's false implication, lack of evidence of direct involvement in the alleged offence, and seeking parity with other accused granted bail. The prosecution highlighted evidence from whats app chats and statements under the GST Act, along with co-accused statements, to establish the accused's involvement. The court noted that the accused had been in custody, his statement recorded, and investigation no longer pending. Considering bail principles from precedents like Anil Mahajan v. Commissioner of Customs and Dipak Subhash Chandra Mehta v. CBI, the court granted bail to the accused on a personal bond of ?5,00,000 with conditions to cooperate in the investigation, not influence witnesses, tamper with evidence, leave the country without court permission, or engage in similar offences.

The judgment emphasized that the accused's release on bail was warranted, as no purpose would be served by keeping him in custody, especially when co-accused with direct involvement had been granted bail. The court's decision was based on the principles of bail grant established by higher courts, ensuring the accused's compliance with investigation requirements and preventing any interference with the legal process.