2024 (9) TMI 234 - HC - GST

Challenge to admission of statutory bail u/s 167 (2) of the CrPC - generation of fake invoices by dummy entities - HELD THAT - Section 167 (2) (a) (ii) of the CrPC is a beneficial provision granting relief to the accused where the investigating agency is not able to complete the investigation within a period of sixty or ninety days as the case may be. It categorically provides that once the prosecuting agency is unable to complete the investigation within the time provided, the benefit cannot be denied to the accused. The right to apply for statutory bail under Section 167 (2) (a) (ii) has been recognized by the Hon ble Apex Court as a Constitutional right. It appears that in the initial stages, serious allegations were made regarding tax evasion of a huge amount of money and the respondent having employed unscrupulous means to pass on the undue advantage of the Input Tax Credit generated by bogus entities on the basis of fictitious invoices and sales to various companies. However, it is peculiar that no complaint has still been filed till date. It is unclear as to why the petitioner department has been contesting the present case for such a long period of time in regard to the custody of the respondent, when the department is obviously not concerned with taking the case to its logical conclusion. This Court fails to understand why despite more than five years having elapsed, no complaint is filed in the present case, even though, at the time of opposing the bail of the respondent, serious allegations were made that the case involves a large amount of public money. There are no merit in the present petition - petition dismissed.

Summary

Issues:
Challenge to bail order based on Section 167 (2) of CrPC.

Analysis:
The judgment challenges an order granting bail to the respondent, who was involved in generating fake invoices to evade taxes. The prosecution alleged that the respondent and a co-accused were part of a scheme involving fake firms and fictitious sales, resulting in a tax evasion of a significant amount. The respondent was initially granted bail but had it cancelled later. However, as the investigation was incomplete and no complaint was filed within sixty days of custody, the respondent applied for statutory bail under Section 167 (2) of the CrPC.

The petitioner department contended that since bail was cancelled earlier, the respondent should not benefit from Section 167 (2) of the CrPC. However, the court dismissed this argument, citing the provision's purpose of granting relief to the accused when investigations are not completed within the specified time. The court emphasized that denying this right would violate the accused's constitutional rights.

The court noted the absence of a filed complaint despite the significant allegations against the respondent. It criticized the petitioner department for prolonging the custody battle without progressing towards trial. The court deemed the department's actions as an abuse of the court process, as it appeared more interested in custody than trial proceedings. The court highlighted the lack of progress in the case over five years, questioning the delay in filing a complaint despite the seriousness of the allegations.

Ultimately, the court found no merit in the petition and dismissed it, emphasizing the importance of upholding the accused's rights under Section 167 (2) of the CrPC and criticizing the petitioner department's handling of the case.