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2021 (12) TMI 120 - HC - GSTSeeking grant of Bail - irregular availment of CENVAT Credit - wrongful utilization of bogus ITC on the strength of fake invoices without physical receipt of the goods - non-existent and fictitious business entities - HELD THAT - The Hon'ble Apex Court in case of NIRANJAN SINGH VERSUS PRABHAKAR RAJARAM KHAROTE 1980 (3) TMI 258 - SUPREME COURT has observed which has also been reiterated in case of SHRI P. CHIDAMBARAM VERSUS CENTRAL BUREAU OF INVESTIGATION 2019 (10) TMI 879 - SUPREME COURT that at the stage of consideration of the matter for granting bail, detailed examination of evidence and elaborate documentation of the merits of the case should be avoided. The prosecution case is mainly based upon the documents in respect of the so-called clandestine business activities. The complaint having already been filed, by now more than four months have already passed. The Petitioner is a permanent resident of the city of Rourkela in the district of Sundergarh and as such hardly there remains the scope for him to flee away from justice. The proceeding for assessment of the GST payable for the transactions may be continuing where the party aggrieved may further carry Appeal and Revision as provided in law. Till such time at the stage of hearing of the application for grant of bail it may be difficult to prejudge the guilt of the Petitioner in ascertaining the exact quantum involved. The assessment in such matter is largely based on documents and relevant records which would take its own time. No other materials are placed to support that further detention of the Petitioner still stands as of necessity for the case. In the meantime, more than four months have passed since the detention of the Petitioner in custody and thus those stages of the investigation here appear to be over when it can be said that the Petitioner being enlarged on bail may stand on the way of proper investigation in collecting all the materials triggering derailment of investigation process with the possibility of the Petitioner influencing the witnesses and absconding on which scores there also stands no material particulars. The Petitioner be released on bail on furnishing bail - Application allowed.
Issues Involved:
1. Allegations against the Petitioner under the Odisha Goods and Services Tax Act, 2017. 2. Petitioner's application for bail under section 439 of the Cr.P.C. 3. Prosecution's opposition to the bail application. 4. Legal principles and precedents regarding the grant of bail. 5. Court's decision on the bail application. Issue-wise Detailed Analysis: 1. Allegations against the Petitioner under the Odisha Goods and Services Tax Act, 2017: The prosecution alleges that the Petitioner, in collusion with other accused individuals, created and operated multiple fictitious business entities. These entities issued fake invoices without the physical movement of goods, resulting in wrongful utilization of bogus Input Tax Credit (ITC). The Petitioner and his associates allegedly defrauded the revenue by passing on and availing ITC amounting to over ?72 crores and ?8.5 crores, respectively. 2. Petitioner's application for bail under section 439 of the Cr.P.C.: The Petitioner filed an application under section 439 of the Cr.P.C. for his release on bail. The defense argued that the Petitioner conducted genuine transactions, paid GST, and that the allegations were based on erroneous calculations. It was contended that the Petitioner had been in custody for over four months, and all relevant documents had been seized, thus eliminating any risk of tampering with evidence. The Petitioner, being a permanent resident of Rourkela, posed no flight risk. 3. Prosecution's opposition to the bail application: The prosecution opposed the bail application, citing the Petitioner’s involvement in a significant economic offense. It was argued that the Petitioner played a crucial role in defrauding the State Exchequer and that his release could lead to tampering with evidence, influencing witnesses, and absconding. The prosecution referenced several Supreme Court decisions to support their stance against granting bail. 4. Legal principles and precedents regarding the grant of bail: The court referred to various Supreme Court judgments outlining the principles for granting bail. Key considerations include the nature of the accusation, severity of punishment, risk of tampering with evidence or influencing witnesses, likelihood of the accused absconding, and the larger interest of the public or State. It was emphasized that detailed examination of evidence should be avoided at the bail stage, and each case should be judged on its own merits. 5. Court's decision on the bail application: The court noted that the maximum punishment under the relevant sections of the OGST Act is five years imprisonment and a fine. Given the extensive searches and seizures already conducted, the Petitioner’s permanent residence, and the absence of material indicating a risk of tampering with evidence or absconding, the court found no necessity for further detention. Consequently, the court granted bail to the Petitioner on furnishing a bail bond of ?50,00,000/- with two sureties of the same amount, subject to conditions to prevent tampering with evidence and ensuring the Petitioner’s presence during the trial. Conclusion: The court disposed of the bail application, directing the Petitioner’s release on bail under stringent conditions to safeguard the integrity of the judicial process. The decision balanced the gravity of the allegations with the principles of justice and the rights of the accused.
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