2021 (5) TMI 169 - HC - GST

Grant of Bail - generation of e way bills of 16 firms by concealing the identity of the real purchaser and real seller tax evasion and revenue loss - offence punishable under sections 132(1)(a) of the CGST Act and the CGST Act - HELD THAT - A close perusal of the complaint prima facie reveals that there are 16 firms, which were part of scrutiny by the investigating agency. As per the case of the prosecution, the applicant is involved in misusing the registration numbers of these 16 firms and the total tax evasion by generating e way bill without revealing the true identity of the real purchaser or real seller is stated to be ₹ 96,047253/ -. The applicant is also ready and willing to deposit some of the amount as per the instructions received by learned advocate Mr.Pandya from the applicant. Taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, at this stage, this Court is inclined to grant regular bail to the applicant - Bail application allowed.

Summary

Issues:
Application for bail under Section 439 of the Code of Criminal Procedure, 1973 in connection with alleged offences under Section 132(1)(a) of the Central Goods and Service Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017.

Analysis:
1. Nature of Offences and Arrest:
The applicant was arrested for allegedly generating e-way bills for 16 firms by concealing identities, causing revenue loss. The prosecution claimed tax evasion of approximately ?9.60 crores. The defense argued that the applicant's involvement was only in 4 out of the 16 firms, with an evasion of around ?1.60 crores. The defense sought bail post-investigation completion.

2. Prosecution's Allegations and Defense's Contentions:
The prosecution contended a larger scam involving 63 firms and tax evasion of ?1,44,00,000. They highlighted lack of cooperation during investigation and incriminating data from the applicant's mobile. The defense countered, emphasizing the limited involvement in 4 firms and readiness to deposit a determined amount.

3. Court's Evaluation and Decision:
After reviewing investigation materials and considering the gravity of the offenses, the accused's role, and the completion of investigation, the Court granted bail. The Court noted the applicant's age, time in custody, limited involvement in 4 firms, and the offense's maximum punishment of 5 years. The Court also referenced the Supreme Court's precedent in a relevant case.

4. Conditions of Bail:
The Court ordered the applicant's release on bail upon executing a personal bond of ?10,000 with a local surety. Various conditions were imposed, including surrendering the passport, regular police station visits, and depositing a significant sum within a specified timeframe. Non-compliance would lead to bail cancellation.

5. Additional Directives and Authorities' Responsibilities:
The Court directed communication of the order to jail and Sessions Court, allowing electronic transmission. The defense counsel was also permitted to send the order electronically. The Court empowered the Trial Court to modify or relax bail conditions as per the law.

In conclusion, the High Court of Gujarat granted bail to the applicant based on the limited involvement in specific firms, completion of investigation, and other relevant factors, subject to stringent conditions to ensure compliance and appearance during the legal proceedings.