Court Upholds Anticipatory Bail Citing Cooperation & Lack of Evidence

The court upheld the anticipatory bail granted to the respondents, emphasizing their cooperation with the investigation and lack of evidence of tampering or non-cooperation. The court highlighted the significant deposits made by the respondents and cited precedent cases to support the decision not to cancel bail. The court dismissed the petition, stating that pre-trial incarceration was unwarranted in this case, relying on established principles for cancellation of bail.

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Issues Involved:
1. Legality of the anticipatory bail granted to the respondents.
2. Compliance and cooperation of the respondents with the investigation.
3. Alleged involvement of the respondents in the GST evasion scheme.
4. Grounds for cancellation of bail.

Issue-wise Detailed Analysis:

1. Legality of the anticipatory bail granted to the respondents:
The petitioner sought to set aside the order dated 24.11.2020, which granted anticipatory bail to the respondents. The respondents were granted bail based on several grounds, including the fact that the alleged amount was yet to be adjudicated, the clean antecedents of M/s Milkfood Ltd., and the respondents not being habitual offenders. The court also referenced a Supreme Court interim order in C. Pradeep vs. The Commissioner of GST and Central Excise, Salem, which directed the petitioner to deposit 10% of the alleged liability. The respondents complied by depositing Rs. 10 Crores as a pre-condition for the anticipatory bail.

2. Compliance and cooperation of the respondents with the investigation:
The respondents argued that they had joined the investigation pursuant to the summons issued by the department and had cooperated fully. They highlighted that Ashish Aggarwal, alleged to be the mastermind, was granted regular bail due to the lack of custodial interrogation by the department. The respondents also deposited an additional Rs. 6.27 Crores, demonstrating their bona fides, bringing the total deposit to Rs. 16.27 Crores, which is almost 20% of the alleged evasion.

3. Alleged involvement of the respondents in the GST evasion scheme:
The petitioner alleged that M/s Milkfood Limited availed fake ITC of Rs. 54.86 Crores from fictitious firms operated by Ashish Aggarwal and Rs. 30.54 Crores from M/s Devyaani Agro Industries, totaling Rs. 85.4 Crores. The petitioner argued that the respondents played active roles in defrauding the Government Exchequer and that the company had complete control over the sales and purchases of the fictitious firms. The respondents, however, denied these allegations, stating that their involvement was limited and that they had complied with all investigation requirements.

4. Grounds for cancellation of bail:
The petitioner argued that the anticipatory bail was granted without appreciating the contentions raised and relied heavily on an interim Supreme Court order. They cited several cases emphasizing the seriousness of economic offenses and the need for custodial interrogation. The respondents countered by arguing that they had cooperated with the investigation and that there were no allegations of tampering with evidence or influencing witnesses. They also cited Supreme Court judgments stating that bail should not be canceled without supervening circumstances.

Judgment:
The court held that the respondents had joined the investigation and there were no allegations of non-cooperation, tampering with evidence, or influencing witnesses. The court emphasized that bail once granted should not be canceled mechanically without supervening circumstances. The court found no reason for pre-trial incarceration of the respondents and dismissed the petition, relying on the judgments in State (Delhi Administration) vs. Sanjay Gandhi and Dolat Ram v. State of Haryana, which outline the principles for cancellation of bail.

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