2022 (9) TMI 607 - HC - GST

Seeking grant of bail - availment of wrong input tax credit - issuance of invoices without actual outward supply of any material - violation of provisions of Section 16 (2) (C) of Central and State Goods and Service Tax Act, 2017 - HELD THAT - Keeping in view the fact that there is an allegation of evasion of taxes in which maximum punishment which can be imposed upon the applicant is imprisonment of one year, that the other allegations are based on the principle allegation of wrongfully claiming I.T.C. for which the maximum punishment is imprisonment for upto one year, whereas the applicant is languishing in jail for more than one year and also considering the fact that the applicant has no criminal history, it is opined that the applicant is entitled to be released on bail. The instant bail application is allowed.

Issues:
1. Bail application seeking release of the applicant in a case involving Sections 417, 467, 468, 471, and 120-B IPC during trial.
2. Allegations of evasion of taxes and wrongful claiming of input tax credit under the Central and State Goods and Service Tax Act, 2017.
3. Applicant's innocence claim, lack of recovery of incriminating evidence, and absence of criminal history.
4. Discretionary relief of bail in economic offenses and the applicant's prolonged incarceration.

Analysis:
1. The applicant filed a bail application in a case involving various serious charges under the IPC during the trial. The case was based on an FIR alleging the applicant's involvement in tax evasion and wrongful claiming of input tax credit under the Central and State Goods and Service Tax Act, 2017. The applicant, through an affidavit, claimed innocence and stated being falsely implicated. The affidavit highlighted the applicant's lack of literacy, denial of forging documents, and absence of any recovery of incriminating evidence from him.

2. The applicant's counsel argued for bail, citing the prolonged incarceration without conclusive proof, referring to relevant judgments in similar cases. The counsel emphasized that the allegations primarily pertained to tax evasion, falling under specific sections of the Central and State Goods and Service Tax Act, with additional IPC sections imposed based on these tax-related allegations. The counsel highlighted the disproportionate incarceration period compared to the potential punishment, which influenced the court's decision.

3. The court, after considering the arguments and facts presented, granted bail to the applicant. The court noted the absence of a criminal history, the nature of the allegations primarily related to tax offenses, and the applicant's extended period of imprisonment without a speedy trial conclusion. The court emphasized that the grant of bail did not imply a judgment on the case's merits but was based on the applicant's entitlement to bail under the circumstances presented.

4. The court imposed specific conditions for the applicant's release on bail, including not tampering with evidence, influencing witnesses, attending court proceedings, and refraining from inducements or threats related to the case. The prosecution was granted the right to seek bail cancellation in case of any breach of the imposed conditions. The judgment highlighted the discretionary nature of bail in economic offenses and the balancing of the applicant's rights with the seriousness of the allegations.

This detailed analysis of the judgment provides a comprehensive overview of the issues, arguments, and the court's decision in granting bail to the applicant in a case involving tax evasion and related offenses under the IPC.

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