2023 (5) TMI 1185 - HC - GST

Seeking grant of bail - irregular availment of input Tax Credit / ITC - suppression of actual sales in their monthly GSTR-3B returns - case of applicant is that the applicant is neither owner nor proprietor of firm, whereas his mother Smt. Anusuiya Mishra is the proprietor of the firm - HELD THAT - It is an admitted fact that the applicant is neither proprietor nor owner of the firm, whereas his mother Smt. Anusuiya Mishra is the proprietor of the firm. No charge-sheet or complaint has been filed by the Department against Smt. Anusuiya Mishra. The investigation of the Department was completed and there is no evidence or material that the applicant had not co-operated with the investigation or tampering the evidence or witnesses. The investigation was completed and charge-sheet/complaint has already been filed and there is no chance of tampering of evidence or influence of witnesses. The maximum punishment under Section 132(1)(a) of the Act, 2017 is five years which is triable by Magistrate. There is no criminal history of the applicant. The applicant is having fixed place of residence and there is no chance of his absconding. Considering the complicity of accused, severity of punishment as well as totality of facts and circumstances, at this stage, without commenting on the merits of the case, it is found to be a fit case for bail - The bail application is allowed.

Summary

Issues:
The judgment involves a bail application in a case under Section 132(1)(a) of the Central Goods and Services Tax Act, 2017, where the applicant sought bail in a complaint case arising from a search conducted at the factory premises and residence, alleging evasion of GST through clandestine supplies.

Details of the Judgment:

1. Search and Seizure:
A search was conducted at the factory premises and residence, leading to the recovery of incriminating records like handwritten sales slips, dispatch registers, and e-way bills. The prosecution alleged that the firm had suppressed actual sales in their returns, with evidence pointing to clandestine supplies to other entities.

2. Applicant's Defense:
The applicant, not the owner or proprietor of the firm, contended that the firm operated within legal provisions, with his mother being the proprietor. He claimed innocence regarding direct involvement in sales and purchases, challenging the Department's calculation of GST based on seized records.

3. Legal Precedent and Anticipatory Bail:
Citing a judgment from Punjab and Haryana High Court, the applicant sought anticipatory bail, emphasizing lack of criminal antecedents and cooperation with the investigation. The court granted bail, highlighting the importance of personal liberty and cooperation in inquiries involving non-bailable offenses.

4. Opposite Party's Allegations:
The opposite party argued that the firm had evaded GST by underreporting sales, implicating the applicant as the controller involved in the alleged clandestine supplies. The complaint filed against the applicant highlighted the revenue loss caused by the firm's actions.

5. Court's Decision:
Considering the applicant's lack of ownership in the firm, cooperation with the investigation, and absence of criminal history, the court granted bail. Emphasizing the severity of punishment and the totality of circumstances, bail was allowed with specific conditions to ensure compliance and prevent misuse of liberty.

6. Bail Conditions:
The court ordered the release of the applicant on bail, subject to conditions including not leaving the country without permission, attending court proceedings, refraining from unlawful activities, and not misusing the bail. Sureties were required, with verification and the possibility of bail cancellation for any breaches.