2024 (2) TMI 854 - HC - GST

Seeking grant of regular bail - utilizing bogus Input Tax Credit (ITC) through fake documents - fraudulently registering the firm under GST Act, solely for the purpose of doing fraud with the Government Revenue, by way of utilizing bogus ITC via paper transactions only, with mala fide intention of not paying taxes - HELD THAT - From the record it is apparent that the petitioner is in custody since 09.12.2022 i.e for the last more than one year. All the offences are triable by the Court of Magistrate and the conclusion of the trial may take quite a long time. Apart from that, the petitioner was involved on the basis of the statement made by Amit Kaushik, who has already been granted the concession of bail by this Court, vide order Annexure P-4. The petitioner is ordered to be released on bail subject to his furnishing bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate - the present petition is allowed.

Summary

Issues involved: Bail application under Section 439 Cr.PC in a case involving FIR under Sections 420, 467, 468, 201 and 120-B of IPC related to fraudulent GST activities.

Issue 1: Allegations and Investigation
The FIR was registered based on a complaint by an Excise and Taxation Officer regarding the fraudulent activities of a firm, M/s A.S. Enterprises, involving bogus Input Tax Credit (ITC) through fake documents. The firm was found to be non-existing and had created a loss to the Government Exchequer by engaging in paper transactions only, contravening the provisions of the GST Act.

Issue 2: Bail Application
The petitioner filed a bail application under Section 439 Cr.PC, seeking release in a case where he was arrested after a delay of more than two years based on a supplementary statement made by a co-accused, Amit Kaushik. The petitioner argued that since the co-accused had been granted bail earlier, his case should also be considered favorably. The State counsel opposed the bail application.

Judgment
The High Court, after considering the arguments, noted that the petitioner had been in custody for over a year and that the trial process might take a significant amount of time. The Court observed that the petitioner's involvement was based on the statement of a co-accused who had already been granted bail. Without delving into the merits of the case, the Court allowed the bail petition, ordering the petitioner's release on bail upon furnishing bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate.