2023 (12) TMI 1194 - HC - GST

Seeking grant of anticipatory bail - scam of availing bogus input tax credit on the basis of forged documents - HELD THAT - The public exchequer has been cheated. It also appears that upon documents of some other persons registration of the GST has been made to avail false input tax credit. Bogus bills are also prepared for the same and thus the present applicant has played an important role in commission of the offence of economic nature. It also surfaces that money is transferred from one account to another account and such huge loss has been caused to the government exchequer by the petitioner. Hence, serious economic offence is made out against the petitioner, which has wide effect on the society. Thus, the petitioner has failed to make out a case to allow this application and grant of pre-arrest bail. No case is made out to exercise the judicial discretion in favour of the applicant-accused. There is no whisper to indicate that petitioner has been falsely implicated in the offence. To be noted that, this is an economic offence having huge magnitude needs to be viewed with different approach and to be considered seriously, as it is eroding economic death of the country. Without expressing any opinion on the merit of the case, this Court is of the view that petitioner cannot be released on pre-arrest bail - Petition dismissed.

Summary

Issues:
The applicant seeks anticipatory bail in connection with FIR No. 11191011220168 of 2022 registered with DCB Police Station, Ahmedabad for offences under Sections 409, 420, 465, 467, 468, 471, 120-B, and 34 of the Indian Penal Code.

Details of Judgment:

Issue 1: Allegations in the FIR
The FIR alleges that the applicant, along with other accused, illegally opened a GST Account using false documents to obtain financial benefits through input tax credit. The applicant is accused of creating a dummy firm, using forged documents to open a bank account and register for GST, and generating bogus bills to obtain input tax credit, causing a financial loss to the government exchequer.

Issue 2: Bail Application
The applicant filed for anticipatory bail after his initial application was rejected. The applicant's counsel argued that he was not involved in the scam, citing his incarceration during the alleged period and lack of direct allegations against him in the FIR. The defense claimed the prosecution exaggerated the charges to harass the applicant and that he is willing to cooperate with the investigation.

Issue 3: Prosecution's Opposition
The Additional Public Prosecutor opposed the bail application, alleging the applicant colluded with other accused to siphon off Rs. 1500 Crore through fraudulent GST registrations and bogus bills. The prosecution highlighted the seriousness of economic offences and the applicant's involvement in similar previous offenses, indicating a habitual pattern of cheating the government.

Issue 4: Court's Decision
After reviewing the FIR and arguments from both sides, the Court found prima facie evidence of a scam involving bogus input tax credit and financial loss to the government. The Court deemed the offense serious, affecting the public exchequer and society at large. Citing precedents on economic offenses, the Court denied pre-arrest bail to the applicant, emphasizing the gravity of the allegations and the need to view economic crimes with a different approach.

Conclusion:
The Court dismissed the bail application, stating that the applicant cannot be released on pre-arrest bail due to the nature and severity of the economic offense alleged against him. The judgment underscores the importance of addressing economic crimes seriously to safeguard the financial health of the country.