2022 (8) TMI 275 - HC - GST

Wrong availment and utilization of ITC - bogus bills - wilful mis-statement and suppression of fact - Presumption of innocence - Sections 406, 420, 467, 468, 471 and 120-B of the Indian Penal Code, 1860 - HELD THAT - There is no compelling circumstance as would call for continued custodial detention of an accused in a Magisterial trial when they have already undergone 1 years of actual sentence and the trial is still at the nascent stage and is likely to take long to conclude. Magnitude of a crime and it social impact are even though essential aspects to be kept in mind while constituting a bail petition, however, the same can not remain the sole ground for prolonging detention for indefinite period of time. Court needs to strike a fine balance while considering an application of bail since the adopted criminal jurisprudence in the country hinges on presumption of innocence. The power to grant bail is not to be deployed as a mechanism for imposing sentence even before a guilt is yet to be proved and established. The present petitions are allowed and the petitioners are admitted to regular bail subject to their furnishing heavy bail bonds/surety bonds to the satisfaction of Trial Court/Duty Magistrate, concerned - It is made clear that the petitioners shall not extend any threat and shall not influence any prosecution witnesses in any manner directly or indirectly.

Issues Involved:
1. Applicability of general penal provisions of the Indian Penal Code (IPC) versus special provisions under the Central Goods and Services Tax Act, 2017 (CGST Act).
2. Considerations for granting regular bail to the petitioners.
3. The principle of presumption of innocence and its impact on bail decisions.

Detailed Analysis:

1. Applicability of General Penal Provisions of IPC versus CGST Act:
The court addressed whether the general penal provisions of the IPC or the specific provisions under Section 132 of the CGST Act would apply to the case. The court noted that this issue should be decided by the trial court. It was undisputed that no proceedings under the CGST Act had been instituted, which could infer an actual loss to the exchequer. Witnesses for the State confirmed that the input tax credit wrongfully retained by the firm had already been paid by the purchasers, indicating no current loss to the State exchequer.

2. Considerations for Granting Regular Bail:
The petitioners sought regular bail under Section 439 of the Code of Criminal Procedure (CrPC). The court considered several factors:
- The petitioners had been in custody for over 1.5 years.
- The trial was a Magisterial trial, and only 2 out of 17 witnesses had been examined.
- The petitioners did not have any other criminal cases registered against them.
- The investigation was complete, and the trial had commenced.
- The maximum sentence under Section 132 of the CGST Act was up to 5 years with a fine.
- The court emphasized that continued custodial incarceration was not likely to advance the interest of justice and that the petitioners' personal liberty should be respected.

3. Principle of Presumption of Innocence:
The court reiterated the principle that bail is the rule and jail is the exception, emphasizing the presumption of innocence. The court cited several precedents, including the Supreme Court's observation in the case of Satender Kumar Antil Vs Central Bureau of Investigation, which highlighted that the object of bail is to secure the attendance of the accused at the trial, not to punish them pre-trial. The court also referenced international principles and practices regarding the presumption of innocence and reasonable bail.

Conclusion:
The court concluded that there was no compelling circumstance to justify the continued custodial detention of the petitioners, especially since they had already undergone 1.5 years of actual sentence and the trial was still in its early stages. The court granted bail to the petitioners, subject to them furnishing heavy bail bonds/surety bonds to the satisfaction of the Trial Court/Duty Magistrate. The petitioners were also instructed not to threaten or influence any prosecution witnesses directly or indirectly. The court clarified that its observations should not be construed as an expression on the merits of the case, which should be decided by the trial court based on the available material.

Final Order:
The petitions were allowed, and the petitioners were admitted to regular bail. The court emphasized the need to balance the magnitude of the crime and its social impact with the principle of presumption of innocence and the right to personal liberty.

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