2020 (8) TMI 204 - HC - GST

Grant of Regular Bail - issuance of fake invoices with the intention of availing fraudulent ITC and from GSTR-3B - HELD THAT - The maximum sentence for the offence alleged is 5 years and the petitioner has been in custody for the last 16 months and the fact that it is a case of rotating the turn over for availing credit facility from the Banks and further the tax after adjustment of ITC was also paid, without commenting on the merits of the case, it is deemed appropriate to grant regular bail to the petitioner. Bail application allowed.

Summary

Issues:
Grant of regular bail under Section 439 Cr.P.C. in a complaint case under Section 132 of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017.

Analysis:
The judgment pertains to a second petition for regular bail in a complaint case involving allegations of fraudulent activities under the GST laws. The complaint was filed by the Deputy Director, Directorate General of Goods and Service Tax Intelligence against a company engaged in trading and manufacturing, accusing them of issuing fake invoices to avail fraudulent Input Tax Credit (ITC) amounting to a significant sum. The petitioner argued that no goods were actually moved, and the alleged activities did not result in any revenue loss as the ITC was used to pay GST, resulting in an excess payment to the government. The petitioner also cited a relevant decision of the Division Bench of the Court in a similar case.

The petitioner had been in custody for 16 months, and the maximum sentence for the offense was 5 years. The respondent emphasized the severity of the economic offense and the magnitude of the case, highlighting that a previous bail application was dismissed. Despite the serious nature of the offense, the court considered the duration of custody, the nature of the offense involving rotating turnover for credit facility, and the fact that taxes were paid after adjusting the ITC. Without delving into the merits of the case, the court deemed it appropriate to grant regular bail to the petitioner, subject to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate in Gurugram.

In conclusion, the court granted bail to the petitioner considering the circumstances of the case, including the duration of custody, the nature of the offense, and the fact that taxes were paid after adjusting the ITC. The judgment reflects a balance between the seriousness of the economic offense and the petitioner's right to seek bail under Section 439 Cr.P.C.