2024 (12) TMI 583 - HC - GST

Seeking grant of bail u/s 132(1)(b), 132(1)(c) read with Section 132(1)(i) of C.G.S.T. Act, 2017 - creation of fake firms and issuance of bogus bills and invoices without any supply of goods and services - HELD THAT - Having regard to the entire facts and circumstances of the case, the nature of the offence, the punishment and the material available on record, the fact that the applicant has no criminal history to his credit and the fact that co-accused Deepak Kumar having more serious role has been released on bail by the coordinate Bench of this Court, and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail. The bail application is allowed.

Summary

Issues:
Bail application under Sections 132(1)(b), 132(1)(c) read with Section 132(1)(i) of C.G.S.T. Act, 2017.

Detailed Analysis:

1. Facts of the Case:
The case involved a bail application by Dheeraj Saini in connection with a GST fraud case where a racket was involved in creating fake firms and issuing bogus invoices without actual supply of goods or services. The main accused, Deepak Kumar, was found to have managed and controlled the operation, creating 44 non-existent firms and availing ineligible input tax credit (ITC) amounting to crores. The applicant, Dheeraj Saini, was found to be actively involved in the fraudulent activities, admitting his role in the creation of fake firms and issuance of bogus invoices.

2. Arguments by Applicant:
The applicant's counsel argued that nothing was recovered from the applicant, and the case was based on alleged confessions of co-accused individuals. It was claimed that the applicant was merely an employee at Deepak Kumar's office and had no direct involvement in creating fake firms or passing on ITC. The counsel also highlighted that no GST liability had been assessed yet and that the offenses were compoundable and punishable with imprisonment up to five years.

3. Opposition by D.G.G.I.:
The counsel for the D.G.G.I. opposed the bail plea, emphasizing the applicant's active role in evading Input Tax Credit through the creation of fake firms. They pointed out the confessional statement of the applicant and the seizure of incriminating digital devices during the search operation. It was argued that releasing the applicant on bail could lead to a repetition of similar fraudulent activities.

4. Court's Decision:
After considering the submissions from both parties and examining the facts and circumstances of the case, the Court granted bail to the applicant. The decision was influenced by the applicant's lack of criminal history, the bail granted to the main accused, Deepak Kumar, by another bench, and without expressing any opinion on the merits of the case. The Court imposed several conditions for the bail, including not tampering with evidence, appearing before the trial court, surrendering the passport, and refraining from criminal activities.

5. Bail Conditions:
The Court ordered the release of the applicant on bail upon furnishing a personal bond and sureties, subject to conditions such as not tampering with evidence, not pressurizing prosecution witnesses, appearing before the trial court, surrendering the passport, and refraining from criminal activities. Breach of these conditions could lead to bail cancellation upon the prosecution's application.

6. Final Remarks:
The Court clarified that the observations made in the bail order were only for the purpose of deciding the bail application and should not influence the trial court's final decision. The bail was granted based on the specific circumstances of the case and the lack of criminal history of the applicant, without prejudging the outcome of the trial.