2020 (12) TMI 1162 - HC - GST

Grant of Regular Bail - alleged input evasion is to the extent of ₹ 29 lakh and odd in respect of Shringar Jewellers - HELD THAT - Without expressing opinion on merits and arguments canvassed by the learned advocates on either side, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, the present application is allowed and the applicant is ordered to be released on regular bail.

Summary

Issues:
Application for regular bail under Section 439 of the Code of Criminal Procedure for offenses under Sections 132(1)(b)(c)(i) and 132(2) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017.

Detailed Analysis:

1. Nature of Offense and Bail Application:
The applicant filed an application for regular bail under Section 439 of the Code of Criminal Procedure for offenses under Sections 132(1)(b)(c)(i) and 132(2) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017. The alleged offense involved evasion of input tax credit to the tune of ?29 lakh in connection with Shringar Jewellers. The applicant argued that the offense was bailable under section 132(iii) and that he had already been granted default bail in a related case. The applicant sought bail based on the nature of the allegation, the amount of input tax, and the evidence presented.

2. Prosecution's Opposition to Bail:
The learned Additional Public Prosecutor representing the respondent-State opposed the bail application, contending that the applicant was part of a well-thought scam involving evasion of input tax exceeding ?5 crore across various firms. It was alleged that the applicant, who worked as an Accountant with Shringar Jewellers, misused the GST number to claim input tax credit after the firm's closure. The prosecution argued that the offense fell under section 132(i) of the Goods and Services Tax Act, punishable by imprisonment up to five years with a fine. The prosecution emphasized the gravity of the offense and urged against granting bail, suggesting that if bail were to be granted, reasons should not be provided.

3. Judicial Decision and Bail Conditions:
After hearing arguments from both sides, the Court decided to grant the applicant regular bail without expressing an opinion on the merits of the case. The Court exercised its discretion to enlarge the applicant on bail, setting a bail amount of ?50,000 with specific conditions. The conditions included not misusing liberty, not acting against the prosecution's interest, surrendering the passport, not leaving Gujarat without permission, reporting to the police station regularly, providing a permanent address, and not changing residence without court approval. The Court also directed that the applicant should only be released if not required in connection with any other offense and warned of consequences for breaching the bail conditions. The Court allowed modifications to the conditions as per the law and instructed that observations made during bail should not influence the trial court's decision.

4. Final Ruling and Directions:
The Court made the rule absolute, permitting direct service of the order. The applicant was ordered to be released on regular bail upon fulfilling the specified conditions. The lower court was tasked with executing the bail bond and had the authority to adjust the conditions as necessary. The trial court was instructed not to be swayed by the preliminary observations made by the High Court during the bail hearing when assessing the evidence during the trial.