2024 (3) TMI 678 - HC - GST

Seeking grant of Regular Bail - allegedly issued GST invoices without any supply of the goods to the buyers on commission basis - HELD THAT - There is no dispute that the applicant is involved in an economic offence of considerable magnitude and gravity. The department has already filed complaint against the applicant, wherein list of documentary evidences has also been furnished. The proprietors of other firms have also been made witnesses in the complaint, who were also the beneficiary of the allegedly illegal conduct of the applicant. The evidence collected against the applicant has been described in the complaint. The offences with which the applicant-accused has been indicted, are all exclusively triable by the Court of Magistrate. The applicant is in jail since 07.11.2023 and there is no allegation that he is having any past criminal history of any economic offence against him. The Hon ble Supreme Court in case of SANJAY CHANDRA VERSUS CBI 2011 (11) TMI 537 - SUPREME COURT has referred the case of STATE OF KERALA VERSUS RANEEF 2011 (1) TMI 1396 - SUPREME COURT to observe that in deciding the bail applications an important factor which should certainly be taken into consideration by the court is the delay in concluding the trial. Here, taking into consideration the course of investigation adopted by the Department and the evidences so collected, the trial may take considerable time and thus it may happen, if nixed the bail, that the judicial custody of the applicant would be prolonged beyond the statutory period of punishment of five years as provided under the Act. Section 132(1)(i) provides for punishment in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine; and section 132(2) provides that, where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine - Taking into consideration the aforesaid provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court deems it proper to exercise discretion in favour of the applicant-accused. The applicant is ordered to be released on regular bail subject to the fulfilment of conditions imposed - bail application allowed.

Summary

Issues Involved:

1. Application for regular bail under Section 439 of the Code of Criminal Procedure, 1973.
2. Allegations of fraudulent GST invoice issuance and Input Tax Credit (ITC) fraud under Sections 132(1)(b) and 132(1)(i) of the Central Goods & Services Tax Act, 2017.
3. Consideration of the applicant's cooperation with the investigation and the evidence against him.
4. The applicant's criminal history and the seriousness of the economic offence.
5. Judicial discretion in granting bail and the balance between individual liberty and societal interest.

Summary:

1. Application for Regular Bail:
The applicant sought regular bail under Section 439 of the Code of Criminal Procedure, 1973, in connection with an FIR registered with the Directorate General of GST Intelligence, Rajkot, for offences under Sections 132(1)(b) and 132(1)(i) of the Central Goods & Services Tax Act, 2017.

2. Allegations and Applicant's Defense:
The applicant, a proprietor of a trading and brokerage firm, was accused of issuing GST invoices without supplying goods, causing a loss of Rs. 33 crores to the government. The applicant argued that he was falsely implicated, had cooperated fully during searches, and that no incriminating material was found against him except for coerced statements.

3. Investigation and Evidence:
The applicant's counsel contended that the investigation was complete, all evidence was seized, and no further recovery was pending. The counsel also highlighted that other accused with similar roles were granted bail. The prosecution argued that the applicant admitted his role in the fraud, and substantial incriminating evidence was found, including statements from co-accused and recovered documents.

4. Applicant's Criminal History and Seriousness of Offence:
The applicant had no previous economic offence history and had been in custody since 07.11.2023. The prosecution emphasized the seriousness of the economic offence and the applicant's role in a syndicate issuing fake invoices, arguing against bail due to the potential for tampering with evidence and influencing witnesses.

5. Judicial Discretion and Bail Decision:
The court considered the applicant's cooperation, the evidence, and the potential delay in trial. Citing the Supreme Court's judgments, the court noted that seriousness alone should not deprive the applicant of bail. The court granted bail, subject to conditions including a personal bond, surrendering the passport, regular police station visits, and not leaving Gujarat without permission.

Conclusion:
The court allowed the bail application, emphasizing the balance between the applicant's right to liberty and the gravity of the offence, while ensuring conditions to prevent misuse of bail. The trial court was instructed not to be influenced by the observations made during the bail proceedings.