2023 (9) TMI 1126 - HC - GST

Seeking grant of bail - wrongful passing of input tax credit - bogus firms - case based on documentary evidence which are in custody of Department - HELD THAT - The respondent department failed to point out the facts that the further custody of the applicant is necessary. The entire case is based on documentary evidence and same are in the custody of the department. The record indicates that after filing the complaint still no show cause notice for determining the liability is issued by the department. In such circumstances, considering the observations made by the Apex Court in case of P. Chidambaram Vs. Directorate of Enforcement, (2020) 13 SCC 791, i.e. even allegations of grave economic offence, it is not a rule that bail should be denied in every case and whether bail is granted or not, will have to be on the case to case basis of the facts involved therein and securing the presence of the accused to stand trial. , it is deemed fit to exercise the discretion in favour of the applicant and accordingly, the applicant is allowed to be released on bail. The applicant is ordered to be released on regular bail on executing a personal bond of Rs.25,000/-, with one surety of the like amount to the satisfaction of the learned Trial Court and subject to the conditions imposed - application allowed.

Summary

Issues involved:
The judgment involves a bail application under Section 439 of the Cr.P.C. in connection with offenses punishable under Section 132(1)(b) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017. The issues revolve around the legality of the arrest, the necessity of custody, and the gravity of the economic offense committed.

Arrest and Custody:
The applicant was arrested without following due procedure of law, as the State Tax Officer raided the residential premise in the late midnight and seized documents. Subsequently, an application for remand and custodial interrogation was granted for 14 days. The applicant was sent to judicial custody after the remand period. The applicant contended that the arrest and custody were not in accordance with the law.

Bail Application History:
Prior to the filing of the criminal complaint, the applicant had filed bail applications which were rejected. After the filing of the complaint, a fresh bail application was filed, which was also rejected. The applicant highlighted the history of previous bail applications and rejections in the case.

Legal Arguments for Bail:
The applicant's senior counsel argued that the allegations were false, the arrest was against guidelines, and further custody was unnecessary. It was emphasized that the right to liberty should be protected, and bail should be the norm. The counsel pointed out that no show cause notice was issued after the complaint, and further detention was unjustified.

Prosecution's Argument:
The prosecution contended that the applicant defrauded the State Exchequer and posed a risk of manipulating or destroying evidence. It was argued that economic offenses require a different approach to bail, considering the gravity of the offense and its impact on the national economy.

Judgment and Bail Conditions:
The court considered the arguments of both parties and observed that further custody of the applicant was not shown to be necessary. Relying on legal precedents, the court exercised discretion in favor of the applicant and granted regular bail. The applicant was ordered to be released on bail upon executing a personal bond and subject to specific conditions to ensure compliance and appearance in court.