2023 (8) TMI 171 - HC - GST

Seeking grant of Bail - registration of business using fraudulent and forged documents to deceive the Government Authorities - misuse of GST online portal to take advantage of input tax credit - issuing fake invoices and e-way bills to pass on input tax credit to other firms and taxable persons - HELD THAT - Petitioner has already been languishing in jail for 1 year 5 months and 13 days in preventive custody, he being behind bars since 14.02.2022 - Petitioner is being kept in preventive custody merely on an unfounded suspicion that if he is let out, he may either tamper with evidence and/ or influence witnesses. There is no probability of tampering with evidence as the same has already been seized by the investigating agency. Petitioner is stated to be 46-year old family man and only bread winner of his family who has added responsibility of his wife and one daughter, who is pursing the degree of law and they are living in sheer penury in his absence. It is unlikely that he is flight risk or will flee from the trial proceedings. Offence allegedly committed by petitioner is of non-violent nature and in that sense his release on bail is not a threat to the society at large by committing any violent crime. Thus, no useful purpose would be served to keep the petitioner in further preventive custody - petitioner is ordered to be released on bail, in case not required in any other case, on his furnishing bail bonds and surety bonds to the satisfaction of learned trial Court - petition allowed.

Summary

Issues Involved:
The issues involved in the judgment are bail application in a criminal case involving charges under Sections 420, 467, 468, 471 and 201 of the Indian Penal Code, 1860, related to tax evasion and fraudulent activities under the CGST/HGST Act, 2017.

Details of the Judgment:

Issue 1: Allegations of Fraudulent Activities
The complaint alleged fraudulent registration under the CGST/HGST Act, 2017, using false documents, including bank account details and photographs, to obtain registration. Investigation revealed the misuse of the GST online portal to issue fake invoices and e-way bills with the intention of evading tax payments. The petitioner was arrested as a suspect in connection with these activities.

Issue 2: Defense by the Petitioner
The petitioner claimed to be falsely implicated, asserting that masterminds behind fictitious firms misused his Aadhar card and PAN card without his knowledge to obtain GST registration. He argued that he was not involved in any wrongdoing under the GST Act and should not be held liable.

Issue 3: Prosecution's Opposition
The State counsel opposed the bail petition, citing serious tax evasion through forged documents. The petitioner's disclosure statement during investigation allegedly confirmed his involvement. The prosecution also pointed out multiple similar FIRs registered against the petitioner, indicating a pattern of habitual offenses.

Issue 4: Granting of Bail
After considering the arguments from both sides, the court noted that charges had been framed, and the trial was ongoing with only a portion of prosecution witnesses examined. The petitioner had been in custody for over a year, and there was no immediate need for custodial interrogation. The court granted bail, emphasizing the petitioner's family responsibilities and non-violent nature of the alleged offense.

Conclusion
The court allowed the bail petition, ordering the petitioner's release on bail upon furnishing necessary bonds. It warned that any involvement in further offenses while on bail could lead to bail cancellation. The court clarified that its observations were specific to the bail petition and should not influence the trial proceedings. Pending applications were also disposed of as part of the judgment.