2021 (6) TMI 156 - DSC - GST

Denial of Bail in Tax Fraud Case Due to Evidence Tampering Risk

The court denied the accused's bail application in a case involving alleged issuance of fake invoices for availing Input Tax Credit (ITC). The decision ... Grant of Bail - bogus invoices - issuance of fake invoices without actual delivery of goods - investigation is still pending as statement of CA is yet to be recorded - HELD THAT:- The grant of bail depends upon complex of facts and circumstances in the light of golden principles laid down from time to time by the higher Courts. In DIPAK SHUBHASH CHANDRA MEHTA VERSUS CBI. [2013 (6) TMI 105 - SUPREME COURT] Hon'ble Apex Court held that the Court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail, a detailed examination of evidence and elaborate documentation of the merits of the case need not be undertaken, there is need to indicate in such orders reasons for prima facie concluding whey bail was being granted. particularly, where the accused is charged of having committed serious offence. The fact of the matter is that accused has himself disclosed that all relevant documents/material pertaining to the alleged transactions is lying with his CA Nitin Jain who is still absconding. The investigation in the present matter is still continuing and is at a crucial juncture as unless the CA Nitin Jain joins investigation and provides all the documentary evidence to the department for the ascertainment of the actual liability, the release of the accused herein would be unwarranted as his release would certainly impede the ongoing investigation in the form of destruction of relevant material or tampering with the evidence - application dismissed. Issues involved: Bail application in a case involving alleged issuance of fake invoices for availing Input Tax Credit (ITC), accused's involvement in the case, nature of evidence, and likelihood of tampering with evidence.Detailed Analysis:Accused's Submission:The accused, a proprietor of a trading firm, claimed innocence, stating he was falsely implicated through arbitrary exercise of executive powers. He argued that no incriminating evidence was found during the search by the department. The accused denied involvement in the issuance of fake invoices and highlighted his compliance with GST regulations, proper goods movements, and clean antecedents. He sought bail, undertaking not to tamper with evidence.Department's Submission:The department conducted searches based on specific intelligence and found incriminating material, including WhatsApp chats, suggesting the accused's involvement in issuing bogus invoices for availing ITC. The department alleged the accused passed on ITC through his firms and implicated a CA for assisting in the fraudulent activities. The department emphasized the ongoing investigation and the crucial role of the absconding CA in providing documentary evidence.Court's Analysis:The court considered the principles laid down by higher courts regarding bail, emphasizing the need for judicious discretion. It highlighted factors such as the nature of the accusation, severity of punishment, supporting evidence, and likelihood of tampering with evidence. The court noted the accused's disclosure that relevant documents were with the absconding CA, indicating a risk of evidence tampering. Given the ongoing investigation and the crucial role of the CA, the court denied bail to prevent obstruction of the investigation.Conclusion:The court dismissed the bail application, citing the risk of impeding the investigation if the accused were released. The court emphasized the importance of preserving evidence and preventing tampering, especially considering the absconding CA's role in the case. The decision reflects the court's cautious approach in granting bail in serious offenses involving potential evidence tampering.