2024 (8) TMI 1093 - HC - GST

Seeking grant of regular bail - applicant had shown fictitious transactions with 69 firms - wrongful benefits of input tax credit - Section 439 of the Criminal Procedure Code, 1973 - HELD THAT - From the record it appears that the present applicant is alleged to have availed input tax credit worth Rs.15.58 Crores on the basis of fictitious transactions which had been shown by the present applicant to have been entered by him with 38 fictitious firms. The record also indicated that the assets of the firms of the present applicant have already been attached and having regard to the same and so also the fact that the punishment of the present offence is five years and the present applicant has been arrested in connection of the present offence in the month of June, 2024, the present application deserves to be allowed. In the facts and circumstances of the case and considering the nature of allegations made in the FIR and without discussing the evidence in details as well as without going into details, prima-facie, this Court is of the opinion that this is a fit case to exercise the discretion to enlarge the applicant on bail. Hence, the application is allowed and the applicant is ordered to be released on bail in connection with the aforesaid FIR, on executing a bond of Rs. 10,000/- with one surety of the like amount to the satisfaction of the trial Court and subject to the fulfilment of conditions imposed.

Summary

Issues:
Application for regular bail under Section 439 of the Criminal Procedure Code, 1973 in connection with availing input tax credit through fictitious transactions.

Analysis:
The applicant sought regular bail, arguing for release with suitable conditions due to the nature of the offense and the applicant's role. The respondent contended that the applicant engaged in fictitious transactions with non-existent firms, availing benefits of input tax credits worth over 15.58 Crore rupees and forging documents. The respondent emphasized the seriousness of the charges and ongoing investigation, asserting no discretion is warranted.

The court reviewed the material and noted the applicant's alleged involvement in availing input tax credit through fictitious transactions with non-existent firms. Considering the attachment of the firms' assets, the severity of the offense (punishable by five years' imprisonment), and the applicant's arrest in June 2024, the court deemed the bail application deserving of approval.

The court considered various aspects, including the three factors mandated by Supreme Court decisions: prima facie case, the accused's availability during trial, and potential witness tampering. The applicant's counsel assured no flight risk, highlighting the applicant's custody since June 27, 2024. The court also referenced the legal precedent set by the Supreme Court in a relevant case.

Based on the nature of the allegations and without delving into detailed evidence, the court exercised discretion to grant bail. The applicant was ordered release upon executing a bond and subject to specific conditions, such as refraining from influencing witnesses, maintaining law and order, providing proof of residence, surrendering passport if applicable, and not leaving the country without court permission. Breach of conditions would empower the Sessions Judge to take appropriate action.

The court directed the concerned authorities to release the applicant unless required for other offenses. It emphasized that the trial court should not be influenced by the prima facie observations made in the bail order. The rule was made absolute, permitting direct service of the judgment.