2024 (7) TMI 47 - HC - GST

Grant of Regular bail - ineligible input tax credit - offence under Section 132 (1) (c) of the Gujarat Goods and Services Tax Act, 2017 - HELD THAT - The role attributed to the present applicant is to the effect that present applicant has availed ineligible input tax credit on the basis of purchases made from several registered entities, which according to the revenue are found to be non-existing. This Court has also considered punishment prescribed for the offence in question and also considered the fact that the applicant is in custody since 12.02.2024. Considering the nature of the allegations made against the applicant in the FIR, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. The applicant is ordered to be released subject to fulfilment of conditions imposed - application allowed.

Summary

Issues involved:
Application for regular bail under Section 439 of the Code of Criminal Procedure, 1973 in connection with alleged GST Act offences.

Analysis:
The applicant, a proprietor of a business engaged in manufacturing and trading, sought regular bail in a case involving alleged GST Act violations. The applicant's vehicle carrying goods was intercepted, leading to allegations of availing ineligible input tax credit. The defense argued that all transactions were genuine, supported by valid documents, and no incriminating evidence linked the applicant to any offense. The defense highlighted the vague nature of the allegations and lack of direct evidence against the applicant. It was contended that mere claiming of ineligible tax credit does not necessarily constitute an offense under the GST Act without concrete evidence of wrongdoing.

The prosecution opposed bail, citing the substantial amount of allegedly evaded tax and the seriousness of the offense under Section 132 (1) (c) of the GST Act. The prosecution claimed that the purchases made by the applicant from registered entities were non-existent, leading to a significant tax evasion amount. The prosecution argued that the gravity of the offense warranted dismissal of the bail application.

After hearing arguments from both sides and considering the circumstances, the Court assessed the allegations against the applicant. The Court also referred to the precedent set by the Supreme Court in a relevant case. Despite acknowledging the seriousness of the allegations, the Court exercised its discretion to grant regular bail to the applicant. The Court ordered the applicant's release on bail upon execution of a personal bond and surety, subject to specific conditions aimed at ensuring the applicant's cooperation with the investigation and preventing misuse of liberty.

The Court directed the applicant to comply with various conditions, including surrendering the passport, marking regular appearances, and not leaving the state without permission. The Court emphasized that the applicant should not obstruct the investigation or tamper with evidence. Additionally, the Court specified that the trial court should not be influenced by its preliminary observations when considering the evidence during the trial. The ruling allowed for modifications to the bail conditions by the lower court as per legal requirements.

In conclusion, the Court granted the bail application, subject to stringent conditions to safeguard the integrity of the investigation and ensure the applicant's compliance with legal procedures.