2019 (4) TMI 1569 - HC - GST

Anticipatory Bail - it was alleged that petitioner have played fraud in Circular Bill Trading - HELD THAT - This Court while considering the similar aspect in SRI AVINASH ARADHYA, SRI MALLOKARADHYA I.P. VERSUS THE COMMISSIONER OF CENTRAL TAX BANGALORE EAST COMMISSIONERATE 2019 (3) TMI 373 - KARNATAKA HIGH COURT has discussed elaborately all the points and thereafter it has come to the conclusion that the accused-petitioners therein are entitled to be released on bail - In the instant case also, similar allegations have been made as against the petitioners and as the said aspect has already been covered by this Court, the petitioners herein are also entitled to be released on anticipatory bail - petitioners herein are granted anticipatory bail - petition allowed.

Summary

Issues:
Petition for anticipatory bail under Section 438 of Cr.P.C. in criminal proceedings related to alleged circular bill trading involving GST Act violations.

Analysis:
The petitioners, husband and wife, are Directors of two companies accused of circular bill trading in Tamil Nadu and Karnataka. The complaint alleges fraudulent trading practices leading to a loss of revenue. The learned Senior Counsel argues that the offenses are compoundable under the GST Act, with no loss of revenue to the government as GST has been paid, no loans taken, and no input supply credit claimed. The petitioners are willing to cooperate with the investigation and abide by court conditions.

The Additional Advocate General contends that the petitioners engaged in inter-State circular bill trading, claiming input tax credit without actual goods movement, potentially affecting the economy. Allegations include raising significant bank loans through fraudulent means. Emphasizing the seriousness of economic offenses, he argues for custodial interrogation to uncover hidden transactions. Lack of cooperation from the petitioners during the investigation is highlighted as a concern, with fears of potential absconding.

The Court, after considering the arguments and a previous similar case, grants anticipatory bail to the petitioners. Conditions for release include executing a personal bond, surrendering before the Investigating Officer, cooperating with the investigation, attending as required, refraining from similar criminal activities, marking monthly attendance, surrendering passports, and staying within the court's jurisdiction. Interim bail applications are also disposed of in light of the judgment.

This detailed analysis covers the legal aspects, arguments, and the court's decision in granting anticipatory bail in the case of alleged circular bill trading violations under the GST Act, emphasizing the importance of cooperation in investigations and setting strict conditions for the petitioners' release.