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2024 (11) TMI 463 - HC - GSTSeeking grant of bail - input tax credit - offence punishable under section 132 (1) (a), (f) (h) and (l) of the Central Goods and Service Tax Act, 2017 - HELD THAT - From the complaint it is revealed that the allegation against the accused petitioner is of issuing fake invoices in the names of nine fake firms which led to evasion of GST by claims of input tax credit on the basis of such fakes invoices. In the complaint the respondent-Department has asserted that there are nine fake firms and in para 13.1 of the complaint they have given the details of the firms and the reasons for declaring them to be fake. It has been stated in the complaint that the addresses as mentioned in the GST registration of such firms is non-traceable and the proprietor of the firms could not be traced. After completion of investigation, the complaint was submitted against the accused petitioner on the basis of evidence collected so far during investigation. There is nothing on record that who claimed how much input tax credit on the basis of alleged fake invoices said to have been issued by the accused petitioner. The maximum punishment for the offences alleged against the accused petitioner is five years and the present accused petitioner has already suffered the custody of more than seven months as he was arrested on 16.03.2024 in the matter. The alleged offences as per the provisions of law are compoundable and triable by Magistrate. The trial of the case is likely to take considerable time. This Court without expressing any opinion on the merits and demerits of the case deems just and proper to release the accused-petitioner on bail - bail application of accused-petitioner namely; Manoj Kumar Jain S/o Late Shri Anil Kumar Jain is allowed and it is directed that the accused-petitioner shall be released on bail provided he furnishes a personal bond in the sum of Rs. 1,00,000/- together with two sureties in the sum of Rs. 50,000/- each to the satisfaction of the trial Court with the stipulation that he shall appear before the trial Court or any other Court to which the matter is transferred, on all subsequent dates of hearing and as and when called upon to do so. Bail application allowed.
Issues Involved:
1. Bail application under Section 439 CrPC for offences under Section 132(1)(a), (f), (h), and (l) of the Central Goods and Services Tax Act, 2017. 2. Allegations of GST evasion through fake invoices and firms. 3. Consideration of personal liberty versus the gravity of economic offences. 4. Legality of arrest and judicial custody without proper assessment and determination of tax evasion. 5. Conditions for granting bail and the accused's cooperation with the investigation. Issue-wise Detailed Analysis: 1. Bail Application Under Section 439 CrPC: - The accused petitioner filed a bail application in connection with FIR No. DGGI/INV/GST/911/2024 for offences under Section 132(1)(a), (f), (h), and (l) of the Central Goods and Services Tax Act, 2017. These sections pertain to offences related to tax evasion, issuance of fake invoices, and fraudulent activities under the GST regime. 2. Allegations of GST Evasion: - The complaint filed by the Senior Intelligence Officer alleges that the accused was involved in creating fake firms and issuing fake invoices, leading to GST evasion. The petitioner allegedly received 1% of the taxable value for creating fake invoices, while another individual, Manoj Kumar Sharma, received 2%. The complaint mentions nine fake firms with non-traceable addresses and proprietors, but there is no conclusive verification of their non-existence or cancellation of GST registration. 3. Consideration of Personal Liberty: - The counsel for the accused argued that the offence is triable by a First Class Magistrate with a maximum punishment of five years, and offences involving tax evasion up to Rs. 5 crores are bailable. The counsel cited precedents from the Supreme Court emphasizing that the gravity of the offence should not be the sole ground for denying bail and highlighted the importance of balancing personal liberty with the need to ensure the accused's presence at trial. 4. Legality of Arrest and Judicial Custody: - The counsel contended that the arrest was made without satisfying the conditions precedent, such as the Commissioner's satisfaction of having reasons to believe the offence was committed. The mandatory provisions of Section 74 of the Act were allegedly not followed, and the assessment and determination of the evaded amount were not fixed before taking coercive steps. 5. Conditions for Granting Bail: - The court noted that the accused had been in custody for over seven months, and the offences were compoundable and triable by a Magistrate. The trial was expected to take a considerable time. The court, considering the overall facts and circumstances, decided to grant bail, emphasizing the accused's cooperation with the investigation and the absence of a flight risk or potential tampering with evidence. Conclusion: The court granted bail to the accused petitioner, requiring a personal bond of Rs. 1,00,000 and two sureties of Rs. 50,000 each. The accused was directed not to leave India without prior permission from the court and to appear before the trial court as required. The decision to grant bail was made without expressing any opinion on the merits of the case, focusing on the principles of personal liberty and the procedural aspects of the arrest and investigation.
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