2023 (3) TMI 272 - HC - GST

Seeking grant of regular bail - cheating and fabrication of bills and documents - earlier bail application dismissed - HELD THAT - The argument raised by learned senior counsel for the petitioner that no separate FIR could be filed and only a complaint under the GST Act could have been filed would not be sustainable since offences under the GST Act and that of the provisions of the IPC as are in the present case are separate and distinct. Even maximum punishment under Section 467 IPC is upto life imprisonment. The allegations against the petitioner were with regard to getting benefit of about Rs.2,68,74,696/- as wrongfully by way of Input Tax Credit and as per the allegations there was no physical movement of any goods and it was all a paper transactions and even as per learned counsels for the parties, the FIR was initially lodged under Sections 420, 467, 468 and 471 IPC and thereafter Section 132 of the Goods Service Tax Act, 2017 was added. The earlier bail petition was dismissed as withdrawn by the petitioner on 24.08.2022 and the present petition has been filed on 29.11.2022 and till date there is no change of circumstance. This Court is of the view that considering the gravity and the magnitude of the allegations involved in the present case and also the apprehension expressed by learned State counsel that in case the petitioner is released on bail, then he may threaten the witnesses, this Court does not deem it fit and proper to grant bail to the petitioner. Consequently, finding no merit in the present petition, the same is hereby dismissed.

Summary

Issues:
Grant of regular bail under Section 439 of the Code of Criminal Procedure for charges under Sections 420, 467, 468, 471 IPC and Section 132 of the Goods & Services Tax Act, 2017. Compliance with guidelines from Arnesh Kumar versus State of Bihar case. Allegations of fraudulent activities and cheating against the petitioner.

Analysis:
The petitioner sought bail citing completion of investigation, non-framing of charges, and the nature of the offenses. The defense argued that the FIR's registration, including GST Act sections, was an abuse of process, as only a complaint should have been filed under the GST Act. Furthermore, they contended that the offense being bailable due to the amount involved supported the bail request.

The State presented evidence of fraudulent activities by the petitioner, involving fake transactions, non-genuine Input Tax Credit claims, and significant financial implications. Investigations revealed discrepancies in the petitioner's business operations, including fabricated bills and tax evasion. The State emphasized the risk of witness tampering if bail was granted, highlighting the seriousness of the allegations.

The court considered the gravity of the charges, the absence of changed circumstances since the previous bail petition's dismissal, and the State's concerns regarding witness intimidation. The court rejected the bail plea, emphasizing the severity and complexity of the allegations and the potential risks associated with releasing the petitioner on bail.

The judgment underscored the distinction between offenses under the IPC and the GST Act, noting the separate nature of the charges and the maximum punishment of life imprisonment under Section 467 IPC. The court dismissed the bail petition, citing the seriousness of the allegations and the potential threat to witnesses if the petitioner were to be released on bail. The decision was made without expressing any opinion on the case's merits.