2022 (12) TMI 1364 - HC - GST

Seeking grant of Regular bail - firms had availed input tax credit on the basis of the invoices received without actual receipt of the goods from 7 registered entities - HELD THAT - There is no straight jacket formula for consideration of bail to an accused, as it all depends upon the facts and circumstances of each case. In the case of UNION OF INDIA VERSUS K.A. NAJEEB 2021 (2) TMI 1212 - SUPREME COURT , it was held that under trials cannot indefinitely be detained pending trial. In the facts of present case, investigation is virtually over and amount as referred having been disclosed during the search proceedings. Therefore the contentions raised by the respondent authority that investigation is underway is not tenable. Admittedly, complaint is filed before the competent court. In such circumstances, when trial would take considerable time and the respondent authority failed to make out a case that further custody of the applicant is necessary, the detention for further period is unwarranted. The applicants are ordered to be released on regular bail, on executing personal bond of Rs.10,000/- each, with one surety each of the like amount to the satisfaction of the learned Trial Court and subject to the conditions imposed - application allowed.

Summary

Issues:
1. Application for regular bail under Section 439 of Cr.P.C. in connection with offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act.
2. Consideration of bail based on contentions raised by both parties.
3. Justification for releasing the applicants on bail.
4. Conditions imposed on the applicants upon being granted bail.

Issue 1: Application for regular bail under Section 439 of Cr.P.C.:
The applicants filed applications seeking regular bail in connection with offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act. The applicants were arrested under Section 69 of the Act after their statements were recorded under duress, confessing to availing input tax credit without actual receipt of goods and issuing invoices without delivering goods. The applicants argued that their arrest was in violation of mandatory provisions, and no cogent reasons were given for their arrest. They contended that their custody violated Article 21 of the Constitution of India.

Issue 2: Consideration of bail based on contentions raised by both parties:
The applicants' senior counsel argued that the applicants had deep roots in society, were not habitual offenders, and the investigation had been exhaustive. They also highlighted that the maximum punishment was up to 5 years and that keeping the applicants in custody for an indefinite period would violate their fundamental right to freedom. On the other hand, the standing counsel and APP for the respondent contended that due to the gravity of the economic offence and the risk of hampering the investigation if the applicants were released on bail, no case was made out for granting bail.

Issue 3: Justification for releasing the applicants on bail:
After considering the facts and circumstances of the case, the court found that the investigation was virtually over, and the complaint had been filed before the competent court. The court noted that the applicants did not have a criminal record, the offence was compoundable, and the maximum punishment was up to 5 years. The court cited the case law that bail considerations should be made on a case-to-case basis, irrespective of the nature and gravity of the charge. Therefore, the court allowed the applications and ordered the release of the applicants on regular bail.

Issue 4: Conditions imposed on the applicants upon being granted bail:
Upon granting bail, the court imposed several conditions on the applicants, including not misusing liberty, not acting in a manner detrimental to the prosecution's interest, surrendering their passport, not leaving India without permission, providing their latest address to the investigating officer and the court, and not changing residence without prior permission. The court also allowed the sessions judge to modify or relax these conditions as per the law.

In conclusion, the court allowed the applications for regular bail, ordering the release of the applicants on bail with specified conditions to be followed.