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2023 (11) TMI 1156 - HC - GSTRejection of bail - fake entities created to pass on and avail Input Tax Credit under the GST regimen (ITC) to defraud government exchequer - exports declared are all bogus and fake - HELD THAT - In RATNAMBAR KAUSHIK VERSUS UNION OF INDIA 2022 (12) TMI 263 - SUPREME COURT , the Hon ble Supreme Court granted bail to the petitioner therein, the facts of the case being somewhat similar to the present case. It is true that the allegation made against the petitioner is that he received the benefit of the amount that was granted to different entities to the tune of Rs. 7,79,52,045/-, obtaining refund of Rs. 7,79,52,045/- and it is contended by the prosecution/complainant that there is likelihood of the discovery of more such transaction, but it is also not disputed that the final prosecution report has been filed in the case. The petitioner was arrested on 11.07.2023, incarcerated for more than four months and the punishment provided is imprisonment which may extend to five years and fine and completion of trial in any event would take some time. Since the alleged offence constitutes the act of crediting amount of ITC through the departmental Online system, to the account of the certain entities which have been alleged to be non-existent and the money has been subsequently received by the petitioner, the evidence tendered by the opposite party/complainant would essentially be documentary and electronic. The ocular evidence will be through official witnesses of the department due to which there can be no apprehension of tampering, intimidating or influencing. This Court is inclined to grant the prayer for bail made by the petitioner subject to such stringent terms and conditions imposed - bail application allowed.
Issues Involved:
1. Legality of the rejection of bail by the lower courts. 2. Examination of the petitioner's involvement and the evidence against him. 3. Consideration of the principles and precedents applicable to granting bail. Summary: 1. Legality of the rejection of bail by the lower courts: The petitioner challenged the order dated 22.08.2023, which rejected his bail application by the learned Special Judge (CBI) Court-I-cum-Addl. Sessions Judge, Bhubaneswar. The petition was filed under Section 439, Cr.P.C., arising from the order dated 11.07.2023 by the learned S.D.J.M., Bhubaneswar, related to offences under Section 69 of the Central Goods and Service Tax Act, 2017, read with Sections 132(1)(b), 132(1)(c), 132(1)(f) of the Act. 2. Examination of the petitioner's involvement and the evidence against him: The prosecution alleged that certain entities with GSTINs were non-existent at their registered premises, created to fraudulently avail "Input Tax Credit" (ITC). The petitioner was accused of creating 111 fake GSTINs, generating bogus transactions, and claiming ITC amounting to Rs. 267,41,14,087/-, resulting in a fraudulent refund of Rs. 16,40,09,812/-. The petitioner argued that there was no material evidence linking him to the firms and that the allegations were baseless. He also contended that the ITC involved was less than Rs. 2 crores within Odisha, and the Department inflated the amount to make the offence non-bailable. The authorities relied on the retracted statement of accused no.2, and the petitioner emphasized that the offences were compoundable under Section 138 of the CGST Act, 2017. 3. Consideration of the principles and precedents applicable to granting bail: The court considered the principles laid down by the Hon'ble Supreme Court in various judgments, emphasizing that "bail is the rule and jail is the exception," and the presumption of innocence until proven guilty. The court noted that the petitioner had been in custody since 11.07.2023 and that the evidence against him was primarily documentary and electronic, reducing the risk of tampering. The court also acknowledged that the petitioner was not a flight risk and was willing to cooperate with the investigation. Citing precedents, including Satender Kumar Antil v. CBI and Ratnambar Kaushik v. Union of India, the court granted bail to the petitioner with stringent conditions to ensure his cooperation and prevent any interference with the investigation. Conclusion: The court granted bail to the petitioner, imposing conditions such as surrendering his passport, cooperating with the investigation, and not tampering with evidence or indulging in similar activities. The BLAPL was disposed of, clarifying that the observations made in the judgment should not influence the pending trial's merits.
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