2019 (11) TMI 280 - HC - GST

Grant of Bail - offences punishable under Sections 132(1)(d) of Central Goods and Service Tax Act, 2017 and Sections 471 and 120-B of the IPC - short payment of service tax with interest - tax evasion - HELD THAT - Looking to the alleged huge tax evasion by the applicant and the contention of the learned counsel of the respondent and keeping in view that the investigation is going on and apprehensions of applicant tampering with the evidence can not be ruled out. So, this Court is not inclined to grant bail to the applicant at this stage. The bail application of the applicant is rejected.

Summary

Issues:
1. Bail application under Section 439 of the Cr.P.C. for offences under Central Goods and Service Tax Act, 2017 and IPC.
2. Allegations of tax evasion, suppression of turnover, and non-payment of GST liabilities against the applicant.
3. Dispute regarding the applicant's innocence, submission of false documents, and impact on ongoing investigation.

Analysis:
1. The applicant filed a bail application under Section 439 of the Cr.P.C. due to arrest in connection with offences under the Central Goods and Service Tax Act, 2017 and IPC. The prosecution alleged that the applicant, running various firms, evaded GST payments since 2017. A search revealed non-payment of GST on collected amounts, leading to a substantial liability of ?62,08,48,909. The applicant claimed innocence, citing pending receipt of funds and discrepancies in the GST returns' accuracy. The defense argued that no offence was established under the GST Act or IPC, emphasizing the ongoing trial's duration as a reason for bail.

2. The prosecution contended that the applicant willfully suppressed turnover to evade GST payments, pocketing amounts collected from clients. Despite deadlines for filing GST returns, the applicant underreported turnover significantly, indicating deliberate evasion. The defense highlighted pending receipts and disputed the accuracy of turnover figures, asserting no intentional wrongdoing. The prosecution emphasized ongoing investigations into multiple firms operated by the applicant, alleging a history of forgery and document submission discrepancies. Concerns over tampering with evidence led to opposition against granting bail.

3. The Court, considering the substantial tax evasion allegations, ongoing investigations, and potential evidence tampering risks, denied the bail application. The decision was influenced by the gravity of the alleged offences, the prosecution's contentions, and the need to maintain the integrity of the investigation. The Court's refusal to grant bail was based on the complexity and seriousness of the case, highlighting the importance of thorough investigation and preventing interference with evidence.