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2024 (8) TMI 1444 - HC - GSTSeeking grant of bail - clandestine supply of branded TMT bars - evasion of GST - whole prosecution case is based upon the statement of Rippan Kansal and no incriminating article or evidence was discovered by the department from the search and inspection of the premises and office of the present applicant - reliability of statement - HELD THAT - In Sanjay Chandra v. CBI 2011 (11) TMI 537 - SUPREME COURT , the Hon'ble Apex Court noticed that it was a case of fraud wherein by cheating and dishonestly inducing delivery of property by using as genuine a forged document was involved but the punishment for the offence was imprisonment for a term which may extend to seven years. The Hon'ble Apex Court held that it is, no doubt, true that the nature of the charge may be relevant but at the same time the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration. Considering the entire facts and circumstances of the case and keeping in view the fact that in the instant matter trial has not started even yet and the complicity of the accused applicant is yet to be determined in trial and everything relevant to the matter is under control of the department itself and there is probably nothing on record to demonstrate that the applicant, if enlarged on bail, would in any way adversely affect the trial; further no final verdict of any Court / Authority for any criminal liability to the credit of the applicant has been brought to the notice of this Court and noticing that the alleged offence is punishable with the maximum period of imprisonment of five years, the applicant is in jail since 20.6.2024, without commenting upon the merits of the case, it is opined that the applicant has made out a case for bail. Let the applicant be released on bail subject to fulfilment of conditions imposed - the bail application of the accused-applicant is allowed.
Issues Involved:
1. Allegations of GST evasion by the applicant. 2. Admissibility and reliability of evidence and statements. 3. Applicant's cooperation with the investigation. 4. Legal principles governing the grant of bail in economic offenses. 5. Conditions for granting bail. Issue-wise Detailed Analysis: 1. Allegations of GST Evasion by the Applicant: The prosecution alleged that the applicant, through his firm, clandestinely supplied branded TMT bars worth Rs. 344 crores, evading GST of approximately Rs. 52 crores from January 2019 to November 2022. The applicant was arrested and sent to jail based on this accusation. 2. Admissibility and Reliability of Evidence and Statements: The applicant's counsel argued that the entire prosecution case is based on the statements of Rippan Kansal and Sanjay Gupta, which are inadmissible until cross-examined under Section 136 of the CGST Act. The counsel cited several cases, including Kumar Trading Company, Varanasi vs. Commissioner of Trade Tax, U.P. Lucknow, emphasizing that the burden lies on the Revenue Authority to prove the genuineness and authenticity of the evidence seized from a third party. The applicant denied any connection with the alleged clandestine activities and claimed that no incriminating articles were found during the search. 3. Applicant's Cooperation with the Investigation: The applicant's counsel contended that the applicant had been cooperative during the investigation, arranging inspections and providing necessary documents. They argued that the applicant could not be termed a habitual offender as the previous case involving a demand of Rs. 3.48 crores was still pending adjudication. The counsel also pointed out that the department did not seek custodial interrogation, indicating no further need for the applicant's custody. 4. Legal Principles Governing the Grant of Bail in Economic Offenses: The court considered the legal principles laid down in various judgments, including Satender Kumar Antil vs. Central Bureau of Investigation and P. Chidambaram vs. Directorate of Enforcement. It was noted that while economic offenses require a different approach, bail is not absolutely barred. The court emphasized that the grant of bail is the rule and refusal is the exception, considering the gravity of the offense and the severity of the punishment. 5. Conditions for Granting Bail: The court concluded that the applicant had made out a case for bail, considering that the trial had not yet started, and the applicant's complicity was yet to be determined. The alleged offense is punishable by a maximum of five years, and the applicant had been in jail since June 2024. The court imposed several conditions for granting bail, including: - The applicant must appear before the trial court on the fixed dates. - The applicant must not commit a similar offense. - The applicant must not tamper with evidence or influence witnesses. - The applicant must surrender his passport and not leave the country without court permission. Conclusion: The bail application was allowed, and the applicant was ordered to be released on bail on furnishing a personal bond and two heavy sureties, subject to the specified conditions. The court emphasized that any breach of these conditions would allow the prosecution to seek bail cancellation.
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