2020 (3) TMI 237 - HC - GST

Bail application - issuance of GST Invoices without any supply of the goods or services to anybody on commission basis causing loss of more than 98 crores approximately - HELD THAT - The principle as laid in case of P.V. Ramanna Reddy vs. Union of India 2019 (5) TMI 1528 - SUPREME COURT holding that though Section 69(1) of CGST, 2017 confers power upon the Commissioner to order arrest of a person for cognizable and non-bailable offence does not contain safeguard incorporated in Section 41 and 41A of the Code of Criminal Procedure, 1973 in view of provision of Section 70(1) of the said Act same must be kept in mind before arresting a person - However, Section 41A(3) of the Code of Criminal Procedure does not provide an absolute irrevocable guarantee against arrest, while turning down the prayer for release of the petitioner on bail and thereby held that petitioner would not be entitled to be enlarged on bail but gave him the liberty to approach the authority for compounding of the offence under Section 138 of CGST Act. The petitioner may be released on bail by the learned Trial Court if he finds that he has approached the authority for compounding of the offence on deposit of at least 20% of the evaded amount on account of CGST. Application dismissed.

Issues:
1. Bail application under Section 439 of the Code of Criminal Procedure, 1973.
2. Allegations under Section 69 read with Section 132(1) of the Central Goods and Services Tax Act, 2017.
3. Lack of notice under Section 73 of the CGST Act, 2017.
4. Sanction for prosecution under Section 134 of the CGST Act.
5. Health issues of the petitioner.
6. Legal arguments on repeated bail applications.
7. Economic offenses and considerations for bail.
8. Previous judgment and principles of law.

Detailed Analysis:

1. The petitioner sought bail under Section 439 of the Code of Criminal Procedure, 1973, after his previous bail application was rejected. He was accused under Section 69 read with Section 132(1) of the CGST Act for issuing GST invoices without actual supply, causing significant financial loss.

2. The petitioner argued that he had no responsibility in the alleged offense, as no notice was issued under Section 73 of the CGST Act. Additionally, the petitioner contended that the prosecution lacked the necessary sanction under Section 134 of the CGST Act.

3. Health concerns were raised regarding the petitioner's prolonged detention, citing severe chest pain and viral fever. The petitioner claimed inadequate medical treatment despite previous hospitalization.

4. Legal arguments were presented regarding the repeated filing of bail applications without changes in circumstances. Precedents and judgments were cited to emphasize the seriousness of economic offenses and the need to deter such crimes.

5. The court highlighted the gravity of economic offenses and previous legal principles. Referring to a specific case, the court emphasized the importance of considering public funds involved, the nature of the offense, and individual circumstances in bail decisions.

6. The judgment reiterated the earlier decision, emphasizing the need for the petitioner to approach the authority for compounding the offense under Section 138 of the CGST Act. The court dismissed the bail application but allowed the petitioner to seek release upon depositing a portion of the evaded amount.

7. Ultimately, the court dismissed the current bail application, maintaining the stance taken in the previous judgment. The petitioner was given the opportunity to seek release through the compounding of the offense under specific conditions.

This detailed analysis covers the various legal, procedural, and substantive aspects addressed in the judgment, providing a comprehensive overview of the issues involved and the court's decision.

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