2023 (1) TMI 539 - HC - GST

Seeking grant of Regular Bail - evasion of tax by wrongly utilization of input Tax Credit for disposal of out tax liabilities without actual payment of tax, resulting into loss of huge revenue to the State exchequer - HELD THAT - Keeping in view the facts and circumstances of the case, custody period of the petitioner and also the fact that the petitioner had already deposited an amount of Rs.9,99,480/- as tax under the GST Act vide intimation dated 14/18.10.2022 (Annexure P-5) in terms of notice served upon him by the Excise and Taxation Department, but without commenting on the merits of the case, the petitioner deserves the concession of regular bail. The present petition is allowed and the petitioner-Bajrang Lal Sharma, is ordered to be released on regular bail subject to furnishing his bail/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate concerned.

Summary

Issues:
Grant of regular bail under Section 439 of the Code of Criminal Procedure, 1973 in a case involving allegations under Sections 420, 467, 468, 471, and 120-B IPC and GST Act.

Analysis:

The petitioner filed a petition seeking regular bail in a case registered against a co-accused initially. The case involved allegations of tax evasion through the misuse of input tax credit under the GST Act. A 'Special Investigation Team' (SIT) was formed to investigate the matter, which revealed the petitioner's firm's involvement in dealing with the accused firm and evading GST. The petitioner was arrested after joining the investigation and making a disclosure statement regarding the purchase of bills to save tax.

The petitioner's counsel argued that the petitioner had paid for the purchases from the accused firm through RTGS, including taxes, and had already deposited a significant amount as tax upon receiving notice from the Excise and Tax Department. It was contended that no penal offense was established under the GST Act, and the petitioner had been in custody since the arrest without any recovery to be made from him. The counsel emphasized that the trial might be prolonged, and there was no purpose in keeping the petitioner in custody, thus requesting the grant of regular bail.

On the contrary, the State Counsel opposed the bail plea, citing specific allegations that the petitioner's firm had engaged with the bogus firm and obtained fake GST bills. However, it was acknowledged that the petitioner had already deposited a substantial tax amount under the GST Act. After hearing both parties and reviewing the case's facts and circumstances, the court noted the petitioner's custody period, the tax payment made, and decided to grant the concession of regular bail without commenting on the case's merits.

In the final judgment, the court allowed the petition and ordered the release of the petitioner on regular bail upon furnishing bail/surety bonds to the satisfaction of the relevant judicial authority.