2022 (12) TMI 1031 - HC - GST

Seeking grant of bail - fraudulently claiming and utilizing of the Input Tax Credit on the strength of the invoices/bills received without actual receipt of the goods from certain non-existing firms - HELD THAT - It is evident that the instant bail application has been filed for quashing of the order of condition No.3 passed on 24.09.2021 and at the time of argument before trial court applicant was agreed with condition No.3 therefore trial court directed to deposit 10% of the amount of Rs.7 crores and 7 lacs in the concerned department, failing which, learned Magistrate may issue warrant for arrest. It is also clear from perusal of the order passed by learned Sessions Judge that applicant made prayer before Sessions Judge while arguing the bail application that he was ready to pay the 10% of Rs.7 crores and 7 lacs and learned Magistrate considered his prayer and granted bail. After getting bail, applicant withdrew himself from argument raised before Sessions Judge. The trial court after considering prayer and granted bail with condition. It appears that court has granted bail after considering submission of applicant. The Hon ble Apex Court in his judgement has passed the order in Chhaya Devi Vs. Union of India and another 2021 (4) TMI 980 - SC ORDER , which are entirely different from the present case as condition has been imposed on prayer of the applicant, hence, the reliance placed by the applicant over Hon ble The Apex Court judgment, is not applicable in the present case. The bail application of the applicant-Mursaleen Tyagi involved in aforesaid case is hereby rejected at this stage.

Summary

Issues:
Bail application challenging condition of depositing 10% amount of Rs.7 crores and 7 lacs within two months, Allegation of fraudulently claiming Input Tax Credit, Applicant's innocence, Legal validity of condition imposed by Sessions Judge, Interpretation of relevant legal judgments.

Analysis:
The bail application was filed challenging the condition of depositing 10% of the amount within two months as imposed by the Sessions Judge. The applicant was accused of fraudulently claiming Input Tax Credit without actual receipt of goods from non-existing firms. The applicant asserted innocence and being falsely implicated. The Sessions Judge granted bail with the condition of depositing the specified amount. The applicant argued against this condition, citing legal judgments emphasizing that bail conditions should not be onerous or tantamount to execution at the inception of the case.

The applicant relied on various legal precedents, including judgments by the Apex Court, to support the argument that bail conditions should not be aimed at realizing disputed dues and must consider factors like severity of punishment, nature of accusation, and public interest. The applicant also cited cases where courts emphasized that bail conditions should not be overly burdensome or unwarranted, especially in the absence of completion of the investigation.

On the contrary, the informant and A.G.A. opposed the bail, highlighting the gravity of the offense and the substantial amount involved in the alleged fraud. They argued that the condition imposed by the Sessions Judge was justified given the magnitude of the alleged fraud involving a significant sum of Rs.12.5 crores. They referred to a Supreme Court judgment where a similar condition was upheld for granting bail.

The High Court, after considering the arguments and submissions, found that the applicant had initially agreed to the condition of depositing the amount before the Sessions Judge, which was a factor in granting bail. The Court noted that the applicant cannot withdraw from the prayer made before the Sessions Judge after obtaining bail. The Court also differentiated the present case from the legal precedent cited by the applicant, stating that the conditions were imposed based on the applicant's own prayer.

Ultimately, considering the seriousness of the offense, evidence, and the applicant's involvement, the Court concluded that it was not a fit case for granting bail. Therefore, the bail application of the applicant was rejected at that stage, upholding the condition imposed by the Sessions Judge.

In conclusion, the High Court's judgment analyzed the legal validity of the bail condition imposed by the Sessions Judge, considering the applicant's arguments, legal precedents, and the gravity of the alleged offense. The decision to reject the bail application was based on the specific circumstances of the case and the applicant's prior acceptance of the condition during the bail hearing before the Sessions Judge.