2024 (2) TMI 796 - HC - GST

Seeking grant of anticipatory bail - ITC availed on the ground of fake bills showing fictitious bills - HELD THAT - As per case of the prosecution petitioner along with co-accused Vishal had created a firm M/s Bhagwati Traders in the rented accommodation by using the mobile phone in name of their friend Sachin and infact, had no functional business therein. During investigation, it has surfaced that petitioner along with co-accused used to create fake bills showing fictitious transactions in the name of non existent firms and in this manner they had caused huge loss to the State exchequer to the tune of more than ₹7 crores, therefore, custodial interrogation of petitioner is required to unearth the modus operandi for committing crime. In these circumstances, considering the nature and gravity of the offence, it is observed that no case is made out in favour of the petitioner for grant of anticipatory bail, as a consequent the petition is hereby dismissed.

Summary

Issues involved:
The petition for anticipatory bail under Section 438 Cr.P.C in a case involving creation of a fake firm, issuance of fake bills, and causing loss to the public exchequer through GST evasion.

Summary:

Issue 1: Anticipatory Bail Application
The petitioner filed a petition seeking anticipatory bail in a case involving FIR dated 20.10.2020 under various sections of IPC and Central Sales Tax Act. The prosecution alleged that the petitioner, along with a co-accused, created a fake firm, M/s Bhagwati Traders, to carry out fictitious transactions and evade GST, causing a loss of over Rs. 7 crores to the public exchequer.

Issue 2: Prosecution's Contentions
The prosecution contended that the petitioner and the co-accused set up the fake firm without conducting any actual business, using it to generate fake bills and transactions. The prosecution argued that custodial interrogation of the petitioner was necessary to uncover the modus operandi behind the fraudulent activities and the substantial loss incurred by the state exchequer.

Judgment
After considering the arguments from both sides and examining the records, the court found that the petitioner and the co-accused had indeed created a fake firm solely for illegal activities, resulting in a significant loss to the state exchequer. Given the gravity of the offense and the need for custodial interrogation to reveal the crime's details, the court dismissed the petition for anticipatory bail, stating that no case was made out in favor of the petitioner. The court clarified that its observations did not reflect an opinion on the case's merits.