2023 (7) TMI 1168 - HC - GST

Seeking grant of Bail - fake firms - input tax credit availed without supplying the goods and on the basis of fake invoices - HELD THAT - Considering the submissions of the parties; particularly considering that investigation is already complete in respect of the present applicant, complaint has been filed on 21.4.2023, he is in jail since 21.2.2023 i.e. for about 5 months, case is based on documentary and electronic evidence, further considering that in the matter of Ratnambar Kaushik 2022 (12) TMI 263 - SUPREME COURT , the matter relates to GST evasion, offence is punishable up to 5 years fine, in the said case, the accused was in jail for more than 4 months, the Hon ble Supreme Court has allowed the bail by observing that in such type of cases, the evidence to be tendered by the respondent would essentially be documentary and electronic, the ocular evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing; this Court is of the view that the applicant can be released on bail. The applicant is directed to be released on bail on his executing a personal bond for a sum of Rs. 1 lakh with 2 sureties for the like amount to the satisfaction of the trial Court - Bail application allowed.

Summary

Issues Involved:
The issues involved in the judgment are bail application in connection with a case registered under Section 132 (1)(b)(c) of the Central Goods and Services Tax Act, 2017, based on allegations of creating a fake firm and wrongly availing input tax credit.

Details of the Judgment:

Issue 1: Grounds for Bail Application
The applicant sought bail contending that he was falsely implicated based on oral statements of other accused, denying any involvement in the alleged fake firm. The defense argued lack of substantial evidence linking the applicant to the crime, emphasizing his societal standing, completion of investigation, and the nature of the offense being triable by JMFC.

Issue 2: Opposition to Bail Application
The GST Department and Objector opposed the bail application, alleging the applicant orchestrated the fraudulent scheme, affecting other businesses and causing substantial financial losses. The Objector highlighted the applicant's role as the mastermind, leading to a significant fine and seizure of assets, arguing against granting bail to someone engaged in deceitful practices.

Issue 3: Economic Offenses and Bail Considerations
The counsel for the GST Department cited the Nimmagadda Prasad case, emphasizing the seriousness of economic offenses and their impact on the country's financial health. The court considered factors such as completed investigation, documentary evidence, and the nature of the offense in determining the bail eligibility of the applicant.

Conclusion:
After considering the arguments and legal precedents, the court granted bail to the applicant, directing his release upon executing a personal bond and providing sureties. The applicant was instructed to comply with trial court appearances and disclose financial details, with restrictions on property alienation without court permission.