2025 (3) TMI 1023 - HC - GST

Seeking grant of regular bail - availment of benefit of Input Tax Credit fraudulently amounting to Rs. 96.95 crores - HELD THAT - In present case the investigation is over and charge-sheet has been filed. As per the case of prosecution the applicant is alleged to have transacted with 24 fictitious firms and the amount of transactions with those firms comes to Rs. 537 crores and on the basis of the said transactions the applicant had wrongful availed the benefit of Input Tax Credit worth Rs. 96.95 crores though no actual goods had been exchanged between the parties. The punishment prescribed for the offence alleged in the FIR against the present applicant is to the extent of imprisonment for the period of 5 years. Having regard to the punishment prescribed for the offence so also the fact that the trial of the offence is not likely to commence and conclude in near future the present application deserves consideration. Conclusion - In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the FIR without discussing the evidence in detail prima facie this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail subject to fulfilment of conditions imposed. Bail application allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the Court was whether the applicant should be granted regular bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhit, 2023, in connection with allegations of fraudulent transactions and wrongful availing of Input Tax Credit (ITC) amounting to Rs. 96.95 crores. The Court also considered the nature of the offence, the evidence presented, and the potential for the applicant to interfere with the ongoing investigation.

ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The application for bail was filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhit, 2023. The Court referenced the precedent set by the Supreme Court in Sanjay Chandra v. Central Bureau of Investigation, which provides guidance on granting bail, emphasizing the importance of balancing the seriousness of the allegations with the fundamental right to liberty.

Court's interpretation and reasoning:

The Court acknowledged the serious nature of the allegations against the applicant, which involved transactions with 24 fictitious firms amounting to Rs. 537 crores and the wrongful availing of ITC worth Rs. 96.95 crores without any actual exchange of goods. Despite the gravity of the charges, the Court noted that the investigation was complete, and a charge-sheet had been filed, reducing the risk of the applicant tampering with evidence.

Key evidence and findings:

The prosecution alleged that the applicant engaged in fraudulent transactions with fictitious firms, leading to a significant wrongful gain through ITC. However, since the investigation was concluded and the charge-sheet filed, the Court focused on whether the applicant's continued detention was justified pending trial.

Application of law to facts:

Applying the principles from Sanjay Chandra, the Court considered the applicant's right to liberty against the backdrop of the completed investigation and the unlikelihood of the trial commencing soon. The Court determined that the applicant could be granted bail with conditions to mitigate risks of interference with the judicial process.

Treatment of competing arguments:

The prosecution argued against bail, citing the applicant's active involvement in the alleged offences and the significant financial implications. In contrast, the defense highlighted the completion of the investigation and argued for bail under suitable conditions. The Court balanced these arguments by imposing strict conditions on the applicant's release to address the prosecution's concerns.

Conclusions:

The Court concluded that the applicant should be granted bail, subject to conditions ensuring he does not misuse his liberty or interfere with the judicial process. This decision was influenced by the completed investigation, the time likely required for trial commencement, and the precedent set by the Supreme Court.

SIGNIFICANT HOLDINGS

The Court held that the applicant is entitled to bail, emphasizing the principle that "bail is the rule and jail is the exception." The Court stated, "this is a fit case to exercise the discretion and enlarge the applicant on regular bail," reflecting the balance between the seriousness of the charges and the applicant's right to liberty.

Core principles established:

The judgment reinforced the principle that pre-trial detention should not be punitive and that bail conditions can effectively mitigate risks of interference with the judicial process. The Court underscored the importance of considering the completion of investigations and the applicant's potential impact on ongoing proceedings.

Final determinations on each issue:

The Court determined that the applicant should be released on bail, subject to conditions, including executing a personal bond, surrendering his passport, not leaving the state without permission, and marking monthly presence at the police station. These conditions aim to ensure the applicant's compliance with legal proceedings while respecting his right to liberty.