2021 (8) TMI 1175 - HC - GST

Seeking grant of bail - generation of invoices without actual supply of goods - offence u/s 132(5) of Central Goods and Service Act, 2017 - HELD THAT - This complaint alleged a huge economic offence and therefore, a thorough and detail investigation is essential. Further, considering the materials so far collected by the Investigating Agency in respect of manipulation of invoices, etc and the role of this petitioner in facilitating commission of the offence of huge tax evasion of ₹ 28,97,85,917/-, the enlargement of the petitioner on bail, at this stage, is likely to hamper the investigation and tamper evidence which may amount to compromising with the entire investigation of the case. This Court has also taken note of the fact that the investigation of the case, involves a huge number of documents to be examined at different levels and at different places necessitating reasonably sufficient time to the Investigating Agency - the prayer for bail of the petitioner stands rejected.

Summary

Issues:
Bail application under Section 439 of Cr.PC for accused-petitioner in connection with GST Case under Section 132(5) of CGST Act, 2017.

Analysis:
1. Facts of the Case:
- The accused-petitioner, a Tax Consultant, is involved in a case of generating fake invoices without actual supply of goods, leading to fraudulent practices of availing and passing on Input Tax Credit (ITC) through fake GST invoices and E-way bills.
- The accused facilitated fake invoices, bills, and prepared false accounts for the principal business, which was found to be fictitious during searches.
- The accused's involvement in arranging fake invoices and acting as a connection with clients of the principal business was established through incriminating documents found during searches.

2. Petitioner's Arguments:
- The petitioner's counsel argued that the accused had no individual role in the offence and had only acted as a Tax Consultant based on the materials provided to him.
- It was highlighted that the accused had been in custody for a month, and further detention was unnecessary for the investigation.

3. Opposing Arguments:
- The Standing Counsel for GST objected to the bail plea, citing evidence of the accused's active involvement in collecting fake invoices and being in connivance with the main accused.
- Reference was made to specific instances of fake invoices procured from various entities, indicating the accused's active participation in the offence.

4. Court's Decision:
- The Court considered the seriousness of economic offences and the need for a detailed investigation in such cases, as highlighted in the Y.S. Jagan Mohan Reddy case.
- Given the evidence of the accused's role in facilitating a significant tax evasion amounting to ?28,97,85,917, the Court rejected the bail plea to prevent interference with the investigation and potential tampering of evidence.
- The Court noted the extensive documentation involved in the case, requiring sufficient time for thorough examination by the Investigating Agency.

5. Conclusion:
- The bail application of the accused-petitioner was rejected at this stage to ensure the integrity of the investigation and prevent any compromise with the case.
- The Court emphasized the need for a detailed investigation due to the complexity and magnitude of the economic offence involved, directing the return of case records.