2025 (4) TMI 800 - DSC - GST

Seeking grant of regular bail - rumming of fake firms - commission of an offence punishable under Section 132 (1) (b) (f) (1) of The Central Goods and Services Tax Act 2017 - HELD THAT - There was every danger of the course of justice being thwarted if the accused was enlarged on bail. The Court can not lose sight of the fact that such like of crimes were on rise and therefore the perpetrators of the crime must be dealt with iron hands. Leniency while granting bail in serious offences was not only undesirable but also against public interest. Given the intricate nature of the fraudulent activities involved and the possibility of a wider network after considering the criminal antecedents of the applicant the commission of offence as alleged was prima-facie found attracted. Hence the applicant-accused Arun Garg is held not entitled to bail under Section 483 of the Cr.P.C. It has also been held in Inderjeet Singh @ Laddy and others Vs. State of Punjab 2014 (1) TMI 1972 - PUNJAB AND HARYANA HIGH COURT that there can not be any settled precedent in criminal cases especially in bail matters. Facts of each case are different and distinct therefore observations made by the Court while deciding a bail can not be taken to be settled and binding precedent by the other Courts dealt with similar matters. Conclusion - The applicant-accused Arun Garg is not entitled to bail under Section 483 of the Cr.P.C. due to the prima facie evidence of his involvement in economic offenses the risk of tampering with evidence and the need to protect societal interests. Application dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary legal issue considered in this judgment is whether the applicant-accused, Arun Garg, is entitled to regular bail under Section 483 of the BNSS in a complaint case alleging the commission of an offense under Section 132 (1) (b) (f) (1) of The Central Goods and Services Tax Act, 2017 (CGST Act). The Court examined the following core questions:

• Whether the applicant's involvement in creating shell firms and availing fraudulent Input Tax Credit constitutes a prima facie case for denying bail.
• Whether the applicant poses a risk of tampering with evidence or absconding if released on bail.
• How the balance between the applicant's right to liberty and the interest of society should be maintained.
• Whether the precedents cited by the applicant's counsel support the grant of bail in this case.

ISSUE-WISE DETAILED ANALYSIS

1. Prima Facie Case and Economic Offense

The relevant legal framework involves the CGST Act, which penalizes fraudulent activities related to Input Tax Credit. The Court considered the allegations that the applicant created nine shell firms to fraudulently avail and pass Input Tax Credit amounting to Rs. 23.66 Crores without actual supply of goods. The Court noted that economic offenses are treated as a distinct class of crimes due to their impact on the economic fabric of society, referencing the precedent set in P.Chidambaram Vs. Directorate of Enforcement.

The Court found that the allegations against the applicant constituted a prima facie case of an economic offense committed with premeditated intent, thereby justifying the denial of bail.

2. Risk of Tampering with Evidence and Absconding

The Court assessed the potential risks associated with granting bail, including the possibility of the applicant influencing witnesses, tampering with evidence, or absconding. The involvement of the applicant's brother in the alleged offenses further heightened these concerns. The Court emphasized that the nature of the crime and the ongoing investigation necessitated the applicant's continued detention to prevent interference with the judicial process.

3. Balancing Individual Liberty and Societal Interest

The Court referred to Supreme Court judgments emphasizing the need to balance individual liberty with societal interest. It highlighted that no right is absolute and reasonable restrictions are permissible. The Court concluded that the interest of society in preventing economic crimes outweighed the applicant's right to liberty, especially given the seriousness and complexity of the alleged offenses.

4. Precedents Cited by the Applicant

The applicant's counsel cited several precedents to support the bail application. However, the Court found these cases distinguishable on facts and not applicable to the present case. It reiterated the principle that each bail application must be decided based on its unique facts and circumstances, as established in Padman Sundra Rao Vs. State of Tamil Nadu and Inderjeet Singh @ Laddy and others Vs. State of Punjab.

SIGNIFICANT HOLDINGS

The Court held that the applicant-accused Arun Garg is not entitled to bail under Section 483 of the Cr.P.C. due to the prima facie evidence of his involvement in economic offenses, the risk of tampering with evidence, and the need to protect societal interests. The Court emphasized that economic offenses require stringent measures and that leniency in granting bail in such cases is undesirable and against public interest.

The judgment reinforces the principle that economic offenses are treated with particular severity due to their potential to harm the economic stability of society. It underscores the importance of evaluating each bail application on its specific facts, without relying solely on precedents.

The application for bail was dismissed, and the Court clarified that nothing in the judgment should be construed as an expression on the merits of the case.