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2021 (9) TMI 111 - DSC - GSTSeeking grant of Bail - availment of irregular credit - credit availed on the strength of the invoices of non exisiting firms - HELD THAT - The grant of bail depends upon complex of facts and factors considered in the light of golden principles laid down from time to time by the higher Courts in DIPAK SHUBHASH CHANDRA MEHTA VERSUS CBI. 2013 (6) TMI 105 - SUPREME COURT where it was held that The Court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail, a detailed examination of evidence and elaborate documentation of the merits of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted, particularly, where the accused is charged of having committed a serious offence. In the given facts, accused is in jail since 23.07.2021. The bail application of the co-accused has been dismissed by Ld ASJ on 31.08.2021. The other co-accused persons are still absconding. The role of the accused is at the same footing with the other accused persons whose application is dismissed by Ld ASJ. The allegations against the accused are serious and investigation is still underway. If accused is released at this juncture, he would definitely interdict with the fair investigation given the fact that the absconding accused persons may be protected by him. Application dismissed.
Issues:
1. Alleged fraudulent availing and passing on of ineligible Input Tax Credit (ITC) by the accused. 2. Contravention of provisions of the Central Goods and Services Tax (CGST) Act in relation to the arrest of the accused. 3. Bail application of the accused in light of the seriousness of the economic offence alleged and the ongoing investigation. Issue 1: Alleged fraudulent availing and passing on of ineligible ITC: The accused, a Director of a company engaged in supplying LED lights, is alleged to have utilized fraudulent ineligible ITC amounting to crores. The department contends that the accused, along with other firms, engaged in transactions involving non-existent entities, issuing invoices without actual supply of goods, and availing ITC of significant amounts. The accused's voluntary statement implicates others in directing the issuance of invoices, with associated entities found to be non-existent. The accused's involvement in the alleged fraudulent activities is considered serious, with the department opposing bail based on the gravity of the economic offence committed. Issue 2: Contravention of CGST Act in arrest of the accused: The accused challenges the legality of his arrest under Section 69 of the CGST Act, contending that proper procedures were not followed. The department conducted a search of the accused's premises, recorded his statement, and subsequently sent him to judicial custody without providing an arrest memo. However, the department argues that the arrest was lawful, supported by evidence of fraudulent activities and non-existent transactions involving the accused and other entities. The accused's health condition and family responsibilities are cited as grounds for seeking bail. Issue 3: Bail application in light of ongoing investigation and seriousness of offence: The court, while considering the bail application, emphasizes the seriousness of the offence alleged, the involvement of the accused in fraudulent activities, and the ongoing investigation. Citing previous judgments, the court highlights the need for caution in granting bail, particularly in cases of serious economic offences. The court notes that the accused has been in custody since July, with a co-accused's bail application already dismissed. Concerns about potential interference with the investigation and protection of absconding accused persons lead the court to deny the bail application, considering the totality of circumstances and the need to ensure a fair investigation. In conclusion, the court dismisses the bail application of the accused, considering the gravity of the alleged economic offence, the involvement of the accused in fraudulent activities, the ongoing investigation, and the potential risks of interference and protection of absconding co-accused persons. The court emphasizes the need to exercise caution in granting bail in serious cases, in line with established legal principles and previous judgments.
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