Bail Denied for Director in GST Fraud Case; Alleged Loss of Rs. 100 Crores

The Court denied the bail application under Section 439 of the Code of Criminal Procedure for the Applicant, a Director/Proprietor of two firms, arrested in connection with a case under the Central Goods and Services Tax Act, 2017. The prosecution alleged the Applicant's involvement in creating bogus entities resulting in a loss of over Rs. 100 Crores to the Government Exchequer. Despite the Applicant's claim of innocence and no personal receipt of money, the Court found substantial evidence linking him to the offence, leading to the rejection of the bail application.

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Issues:
Bail application under Section 439 of the Code of Criminal Procedure for grant of regular bail in connection with a case registered under the Central Goods and Services Tax Act, 2017.

Analysis:
The Applicant, a Director/Proprietor of two firms, was arrested in connection with a case registered under Sections 132(1)(b), 132(1)(c), 132(1)(k), 132(1)(i), and Section 16 of the Central Goods and Services Tax Act, 2017. The prosecution alleged that the Applicant was involved in creating bogus entities to pass on irregular and inadmissible Input Tax Credit (ITC) to beneficiaries, resulting in a loss of over Rs. 100 Crores to the Government Exchequer. The Applicant was arrested following a search at his residence where books of accounts, registers, and fake invoices were recovered. The prosecution claimed that the Applicant's firms were major beneficiaries of these transactions, which were conducted through circular/semicircular transactions involving more than Rs. 500 Crores. The Applicant has been in custody since the arrest on 7.5.2019.

The Applicant's counsel contended that he is innocent and wrongly implicated in the case. It was argued that no complaint has been filed against him, and there is no evidence of him receiving any money personally. The counsel further argued that the arresting officer wrongly exercised power under Section 69(3) of the Act of 2017, as the Applicant's transactions were through bank transactions. It was emphasized that the Applicant, being a permanent resident of Raipur, poses no flight risk or threat to tamper with evidence, warranting the grant of bail.

In response, the Respondent's counsel asserted that there is substantial evidence linking the Applicant to the alleged offence, emphasizing the significant loss caused to the Government Exchequer. The Respondent argued that the Applicant was rightfully arrested under Section 69 of the Act of 2017 by authorized officers.

After considering the arguments, evidence, and seriousness of the offence, the Court declined to grant bail to the Applicant. The decision was based on the allegations against the Applicant, the evidence collected by the prosecution, and the substantial amount of money involved in the offence. Consequently, the bail application was rejected.

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