2020 (12) TMI 1041 - HC - GST

Grant of Regular Bail - wrongful adjudged input tax credit resulting in loss of tax to the Government exchequer to the extent of ₹ 2.24 crores - HELD THAT - The condition in the impugned order with regard to the payment of ₹ 2,24,46,239/- alongwith interest is set aside and the bail bonds of ₹ 50 lakhs with one surety in the like amount are reduced to ₹ 25 lakhs which may be in the form of immovable property to the satisfaction of the Illaqa Magistrate/Duty Magistrate, Panipat - The impugned order passed by the Additional Sessions Judge, Panipat dated 11.12.2019 is modified only to the extent above and the other conditions therein are ordered to remain intact. Petition allowed in part.

Summary

Issues:
Prosecution under various sections of IPC for wrongly adjudged input tax credit resulting in loss to the Government exchequer. Challenge to conditions imposed for granting bail.

Analysis:
The petitioner, a sole proprietor, faced prosecution under Sections 419, 420, 467, 468, 471, 259, and 120-B IPC for wrongly adjudged input tax credit causing a loss to the Government exchequer. The Trial Court granted bail subject to conditions including payment of outstanding GST liability and furnishing bail bonds. The petitioner challenged these conditions under Section 482 Cr.P.C., arguing they violated the Goods & Services Tax Act, 2017 and were contrary to a previous judgment. The petitioner contended that the conditions imposed were unreasonable and against judicial scrutiny based on a previous case, Ranjit Singh vs. State of Haryana.

The State counsel acknowledged that the judgment in Ranjit Singh's case favored the petitioner, and no challenge had been made to it before the Supreme Court. The judgment in Ranjit Singh's case highlighted the principle that bail is the rule and jail is the exception, emphasizing the importance of liberty until proven guilty. It referenced the Sanjay Chandra case, where bail was granted due to completed investigation and chargesheet filing, despite serious charges. The judgment emphasized that the severity of charges alone should not deny the right to liberty.

The Additional Sessions Judge imposed conditions leading to the petitioner's continued incarceration, despite the offense being bailable under certain sections. The conditions were deemed unreasonable and unsustainable under judicial scrutiny. Consequently, the present petition was accepted, and the conditions regarding payment of outstanding amounts and bail bonds were modified in favor of the petitioner. The judgment in Ranjit Singh's case was applied to support the modification, and the impugned order was set aside in part, reducing the bail bond amount and setting new conditions for bail.

In conclusion, the petition was allowed based on the precedent set in Ranjit Singh's case, and the conditions for bail were modified in favor of the petitioner. The impugned order imposing specific financial obligations on the petitioner was set aside, and new conditions for bail were established in line with the principles of liberty and judicial scrutiny.