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TMI Blog2020 (12) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been evading the Tax as alleged by receiving and issuing the bogus bills and invoices without actual sale or transportation of Goods. Total amount of evasion is 541 Crores. There is also an allegation as to creating fake firms to claim Input Tax Credit. There are 9 bogus firms as shown created and had issued fake invoices. In the present case in hand the main allegations of the department against the accused is that they are guilty of circular trading by claiming fake invoices on the materials never purchased and passing on input tax credit to companies to whom they never sold any goods. There are allegations as to fake companies were also formed to execute smooth illegal trading. The department has estimated that the fake GST invoices were issued to the total value of about 541 Crores - It is settled law supervening circumstances for the cancellation of bail, must be of such a nature as to lead to the conclusion that the accused does not deserve to be at liberty either by reason of a violation of the conditions of bail or due to supervening conduct which bears upon the misuse of the liberty by the accused. Application allowed in part. X X X X Extracts X X X X X X X X Extracts X X X X ..... d that during the course of inquiry respondent came to be arrested on 05/09/2020. During being in custody bail application was prefered before Trial Court. Respondent had orally offered that he would file an application for compounding the offence and was ready to pay the amount as prescribed in the law. It is submitted the Ld. Magistrate has seriously erred to hold accused has approached the Court with application for compounding. Ld.Magistrate has no authority in law to entertain any such application for compounding and thus, impugned order on the basis of said bail was granted is a grave error committed by Ld. Trial Court. Finally it is submitted the finding of Ld.Magistrate in impugned order are contrary to the record available and without considering the severity of the offence. Hence, it is prayed the impugned order dt. 25/9/2020 passed by the Trial Court in Bail Application may kindly be set aside and bail granted to respondent No.1 be cancelled. 8] On the other hand, Ld. advocate for the accused/ respondent vehemently submitted that the Ld. Trial Court has rightly observed the facts and circumstance and bail was granted while discussing the merits. No perversity or illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2 SC(Cri.) 508 Dinesh M.N. (S.P.) V/s. State of Gujarat, (5) (2013) 4 SCC (Cri.) 614, Karwar Singh Meena V/s. State of Rajasthan and Anr. (6) 1984 SCC (Cri.) 63, Bhagirathsingh S/o. Mahipat Singh Judeja V/s. State of Gujarat. (7) 2004 SCC (Cri.) 551 Mehboob Dawood Shaikh Vs. State of Maharashtra (8) (2006) 1 SCC (Cri.) 511 Ram Charan V/s. State of M.P. (9) (2020) 1 SCC (Cri.) 799, 2020 (2) SCC 743 Myakala Dharmarajam & others V/s. State of Talangana and anr. (10) 1988 SCC (Cri.) 318 UsmanBhai Dawood Bhai Memon V/s. The State of Gujarat (11) (2014) 1SCC (cri.) 252 (2014) 1 SCC 258 Pragya Singh Thakur V/s. National Investigating Agency. 14] In response to the submissions of respondent/accused strenuously argued that respondent accused is one of the director in the company M/s. Germanium Pvt. Ltd. having its office at Nerul, Navi Mumbai. 15] It is alleged investigation was conducted by Anti Evasion of Central Goods and Service Tax and Central Excise (CSGT) and it is revealed that the above mentioned company was engaged in circulating and receiving and issuing fake invoices for the purpose of availing ITC and passing it to other companies without any actual movements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V/s. Ram Vilas and another (Supra). All the other citations relied are based on the same principles applicable for grant of bail and cancellation of bail. 21] From the observations in the cited authorities in the case of Daulatram V/s. State of Haryana reported in 1995 SCC Crimes 237 which is also referred by the Hon'ble Supreme Court in the case of Puran V/s. Ramvilas and another (Supra). It has been observed cancellation of bail already granted has to be considered and dealt on different basis. It has been held that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of bail already granted. 22] Taking into consideration the legal aspects and the facts which arise on the present application. It is apposite to reproduce the major portion of impugned bail order. Para 5, a conclusion portion of the bail order is hereby reproduced : PARA 5 : "The accused is already in custody since 05/09/2020 and has come forward to compound the offence as per section 138 of the GST Act. On perusal of the provision U/Sec. 138 of the GST Act, it is made clear that any offence can be compounded under this Act, either before or after the institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basically on an undertaking given to the trial Court as to he would compound the offence on the payment of tax amount. The trial Court was pleased to accept the said undertaking and thereby granted bail. 25] It is worth to be noted the offence as alleged is an economic offence, whereby the applicant since July, 2017 till the date has been evading the Tax as alleged by receiving and issuing the bogus bills and invoices without actual sale or transportation of Goods. Total amount of evasion is ₹ 541 Crores. There is also an allegation as to creating fake firms to claim Input Tax Credit. There are 9 bogus firms as shown created and had issued fake invoices. 26] It has been observed by the Apex Court in the case of Nimmagadda Prasad V/s. Central Bureau of Investigation reported in 2013(7)SCC 466 wherein the Apex Court observed that , "economic offences constitutes a class apart and need to be visited with different approach in the mater of bail. The economic offence having deep rooted conspiracy and involvement of huge loss of public fund needs to be viewed seriously and considered as grave offences affecting the economy of a country as a whole and thereby posing serious threa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong exercise of the Trial Court is required to be corrected. 31] It is settled law supervening circumstances for the cancellation of bail, must be of such a nature as to lead to the conclusion that the accused does not deserve to be at liberty either by reason of a violation of the conditions of bail or due to supervening conduct which bears upon the misuse of the liberty by the accused. 32] It is relevant to note that there is a difference between yardsticks for cancellation of bail and or appeal against the order of granting bail. Very cogent and overwhelming circumstances are necessary for order directing the cancellation of bail already granted. 33] It is apposite to note from the entire order it is nowhere seen as to the reason is given while granting bail. Giving reasons is different from discussing merits or demerits. At the stage of granting bail the detail examination of evidence and elaborate documentation of the merits of the case has not to be undertaken. That did not mean that whilst granting bail some reasons for prima facie concluding why bail was being granted did not have to be indicated. While granting bail particularly in serious cases like present case it r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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