2024 (8) TMI 702 - HC - GST

Grant of bail - fabrication of registration certificates and claiming inadmissible input tax credit to evade payment of GST - Section 132 (1) (i) of the Central and State GST Act, 2017 - HELD THAT - In the instant case, as the petitioner has been under judicial custody for the last 61 days, the investigation is not complete and the final report has not been laid, it is convincing that the petitioner is entitled to be released on statutory bail, since it is his indefeasible right under Sec.167(2) of the Code. The application is allowed, by directing the petitioner to be released on bail on him executing a bond for Rs. 1,00,000/- (Rupees One lakh only) with two solvent sureties each for the like sum, to the satisfaction of the court having jurisdiction, which shall be subject to the fulfilment of conditions imposed - bail application allowed.

Summary

Issues:
Application for bail under Sec.439 of the Code of Criminal Procedure in a case involving alleged tax evasion under Sec. 132 (1) (i) of the Central and State GST Act, 2017.

Analysis:
The judgment pertains to an application for bail filed by the sole accused in a case registered by the Kerala State Goods and Services Tax Department for allegedly committing an offense under Sec. 132 (1) (i) of the GST Act. The accused was arrested and remanded to judicial custody. The prosecution alleges that the accused obtained fake registration certificates to claim input tax credit, evading tax amounting to Rs.15.91 crore.

The petitioner's counsel argued that the accused is innocent, with no substantial evidence against him. The petitioner has been in custody for 61 days, and the investigation is incomplete. The counsel contended that the accused is entitled to bail as the offense is punishable for up to five years. The Special Public Prosecutor opposed bail, citing incriminating evidence and the risk of tampering with evidence if released.

The court considered the provisions of Sec. 167 of the CrPC, which allow for the release of an accused on bail if the investigation is not completed within a specified period. Referring to legal precedents, the court highlighted that an accused gains an indefeasible right to bail if the investigation exceeds the prescribed period. Given the circumstances of the case, the court concluded that the petitioner is entitled to statutory bail under Sec. 167(2) of the Code.

Consequently, the court granted bail to the petitioner upon executing a bond and imposing specific conditions. These conditions include regular appearances before the Investigating Officer, refraining from influencing witnesses or tampering with evidence, surrendering the passport if applicable, and adherence to other stipulations. The court empowered the jurisdictional court to consider any applications for bail cancellation and allowed for modifications to the bail conditions as necessary. Additionally, the Investigating Officer retained the authority to continue the investigation and effect recoveries as per legal guidelines even while the accused is on bail.