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2023 (7) TMI 816 - HC - GSTSeeking grant of bail - fraudulent availment of Input tax Credit - issuance of fake invoices - no delivery of goods - HELD THAT - The applicants have reversed a substantial amount of ITC i.e. Rs. 113, 90, 49, 678/-; further considering that applicants have been in jail since 29.11.2022; that offence is triable by JMFC and maximum sentence for the offence is up-to 5 years; further considering that material evidences appears to be documentary and electronic in nature so there is no chance of tampering or influencing the evidence and no likelihood of flight-risk of the applicants it is found appropriate to release the applicants on bail. The application is allowed and it is directed that on each of the applicants furnishing a personal bond in the sum of Rs. 2, 00, 000/- with two sureties each for the like sum to the satisfaction of the concerned Court they shall be released on bail on the conditions imposed.
Issues Involved:
1. Applicability of Section 132(1)(b) & (c) of the CGST Act, 2017. 2. Consideration for grant of bail u/s 439 Cr.P.C. 3. Reversal of Input Tax Credits (ITC) and its impact on bail eligibility. 4. Comparison with previous judgments on similar matters. 5. Conditions imposed for granting bail. Summary: 1. Applicability of Section 132(1)(b) & (c) of the CGST Act, 2017: The applicants were accused of issuing fake invoices and fraudulently availing ITC amounting to Rs. 114,70,55,251/-. They had also passed forged bills worth Rs. 1,04,33,454/-. The applicants, Mohd. Tabrez Amdani, Director of M/s. Topisto Products Pvt. Ltd., and Ashish Kumar Tiwari, Accountant, allegedly formed four other firms to fraudulently avail ITC. 2. Consideration for grant of bail u/s 439 Cr.P.C.: The applicants sought bail under Section 439 Cr.P.C., arguing their innocence and claiming that they were falsely implicated. They emphasized that the remaining disputed amount was less than Rs. 5 Crore, making the offence compoundable and bailable. They cited the Supreme Court judgment in Ratnambar Kaushik Vs. Union of India, which highlighted that economic offences involving documentary and electronic evidence reduce the risk of tampering. 3. Reversal of Input Tax Credits (ITC) and its impact on bail eligibility: The applicants reversed ITC amounting to Rs. 113,90,49,678/- before filing the complaint, leaving a disputed amount of Rs. 1,04,33,454/-. The court considered this substantial reversal and the fact that the applicants had been in jail since 29.11.2022. 4. Comparison with previous judgments on similar matters: The respondent opposed the bail, referencing the High Court's decision in Basudev Mittal Vs. Union of India, where bail was rejected despite partial deposit of the disputed amount. The court also considered the principles laid out in Nimmagadda Prasad Vs. Central Bureau of Investigation and P.V. Ramana Reddy Vs. Union of India, which emphasized the gravity of economic offences and the need for a different approach in bail matters. 5. Conditions imposed for granting bail: Considering the documentary nature of evidence, lack of flight risk, and substantial ITC reversal, the court granted bail. The applicants were required to furnish a personal bond of Rs. 2,00,000/- with two sureties each. They had to provide an affidavit detailing their assets, refrain from alienating property without court permission, ensure their presence at trial, and avoid similar offences in the future. Conclusion: The court allowed the bail application, subject to specific conditions, emphasizing the principles of fairness and the non-punitive nature of pre-trial detention.
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