2022 (4) TMI 866 - HC - GST

Seeking grant of Regular Bail - unauthorised and fraudulent claim of input tax credit - cheating and fraud - offences under Sections 420, 468 and 471 of the IPC - HELD THAT - The chargesheet and a supplementary chargesheet having been filed, the applicant is entitled to bail in the facts and circumstances of the case. From the Status Report quoted above, it appears that the main link of the present applicant with the transactions in question is on the basis of the use of the mobile No. 9015824684 and his email address. As far as the mobile number in question is concerned, the chargesheet and the Status Report reveal that it was transferred to the applicant only on 13.03.2018. The email addresses mentioned in paragraph 6 of the Status Report were also accessed not through the applicant but through another party. In the Status Report, the prosecution has made out a case that the applicant, in conspiracy with Shubham Khandelwal, had registered various bogus firms and opened fictitious bank accounts. There is no suggestion in the Status Report that the applicant neither has prior criminal antecedents nor is there any material to suggest that he is a flight risk. The applicant has been in custody for a period of approximately nine months since 14.07.2021. The evidence in the present case is largely documentary, and has already been placed before the Trial Court. The chances of the applicant tampering with the evidence is therefore unlikely. The applicant is admitted to bail, subject to the conditions imposed - application allowed.

Summary

Issues:
1. Bail application in connection with FIR for offences under Sections 420, 468, and 471 of the IPC.
2. Allegations of cheating and fraud by a company causing loss to the government.
3. Accusations of setting up fictitious companies for defrauding the government.
4. Involvement of the applicant in a complex scheme of generating bogus invoices.
5. Consideration of bail based on seriousness of charges and risk of tampering with evidence.

Analysis:
1. The petitioner sought regular bail in connection with FIR No. 263/2018 for offenses under Sections 420, 468, and 471 of the IPC. The FIR implicated the petitioner in fraudulent transactions causing a substantial loss to the government, allegedly related to unauthorized GST claims by a specific company.

2. The chargesheet filed in the case named the petitioner as an accused, linking him to the establishment of fictitious companies aimed at defrauding the government. The prosecution alleged that the petitioner and a co-accused engaged in fraudulent activities through fake identities and bogus invoices, impacting the government's revenue.

3. The prosecution presented evidence suggesting the petitioner's involvement in a well-planned scheme of setting up fictitious companies, utilizing false identities to manipulate financial transactions. The petitioner's association with the transactions was primarily based on the use of specific mobile numbers and email addresses, indicating a coordinated effort to deceive the authorities.

4. The defense argued that the petitioner's connection to the incriminating transactions was circumstantial, emphasizing that the mobile number and email addresses in question were transferred or accessed by other individuals involved in the scheme. The defense contended that the petitioner's role was limited to employment under one of the main accused, distancing him from the core fraudulent activities.

5. The court considered the seriousness of the charges and the potential risk of tampering with evidence while evaluating the bail application. Despite the gravity of the offenses, the court granted bail to the petitioner, noting the lack of prior criminal records or flight risk, along with the predominantly documentary nature of the evidence presented. The court imposed specific conditions for the petitioner's release on bail, emphasizing compliance with reporting requirements and non-interference with the investigation.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the court's reasoning leading to the decision to grant bail in the context of the complex financial fraud case.