2023 (9) TMI 231 - HC - GST

Rejection of grant of bail - evasion of tax - wrongful availment and passing of ITC - Sub Clauses (b) (c) of Sub-Section 1 of Section 132 of GST Act - HELD THAT - Investigation qua the petitioner is complete. Petitioner is thus not required for custodial interrogation. Allegations against the petitioner are matter of trial. There are 64 prosecution witnesses. Matter is now fixed for 06.09.2023 for pre-charge evidence of complainant. Commencement/conclusion of trial will take some time. Bail allows an accused to maintain his freedom until his guilt or innocence is determined. Whereas, petitioner remained in custody with effect from 30.10.2020 to 25.05.2021, per custody certificate. He however, admits that no other case is pending against him. Petitioner is stated to be 45-year old family person, and in his absence, his family members are living in sheer penury. He is only breadwinner of his family. He has already lost his livelihood due to prolonged incarceration. Having clean antecedents and fixed abode, it is unlikely that he poses any flight risk and/or will flee from trial proceedings - Considering the overall scenario and without commenting on the merits of the case, the instant petition is allowed. Thus, no useful purpose would be served to further incarcerate the petitioner. The petitioner is ordered to be released on bail, if not required in any other case, on his furnishing bail bonds and surety bonds to the satisfaction of learned trial Court, where his case is being tried and in case he/she is not available, before learned Duty Judge, as the case may be.

Summary

Issues involved:
The issues involved in this case include bail application in a matter under the Haryana GST Act, 2017 and Central GST Act, 2017, concerning tax evasion exceeding Rs. 5 crore, issuance of bogus invoices, and illegal transfer of Input Tax Credit.

Summary:
The petitioner sought regular bail after being denied bail by the trial court in a case involving tax evasion exceeding Rs. 5 crore under the Haryana GST Act, 2017 and Central GST Act, 2017. The firm, M/s Emm Vee Trading Company, owned by the petitioner, was found to have displayed abnormal fluctuations in turnover, leading to suspicions of tax evasion. The firm was registered at a residential address with no business activities observed at the location. Investigations revealed discrepancies in e-way bills issued by the firm and the actual movement of goods, implicating the petitioner in the alleged tax evasion scheme.

The petitioner argued that he was not the originator or ultimate beneficiary of the invoices in question, and tax evasion occurred at the buyers' end, not his. He claimed to be a scapegoat and not the actual proprietor of the firm, suggesting that others involved were let free while he was wrongly implicated. The petitioner's counsel contended that there was no concrete evidence connecting the petitioner to the alleged crime and that he was merely an intermediary in the transactions. The petitioner had already suffered seven months of incarceration and was not a flight risk.

The State counsel opposed the bail petition, stating that the petitioner was the mastermind behind the issuance of bogus invoices to fraudulently avail and transfer Input Tax Credit, posing a risk to government revenue. However, the court found that the offence was nonviolent, and the petitioner's release on bail would not pose a threat to society. Considering the petitioner's family situation, clean record, and lack of flight risk, the court granted bail, emphasizing that any future offences could lead to bail cancellation.

In conclusion, the court allowed the bail petition, ordering the petitioner's release on bail upon furnishing the necessary bonds. The court clarified that its observations were limited to the bail hearing and should not influence the trial court's proceedings.