Court denies anticipatory bail in CGST & Central Excise case involving pharmaceutical trading

The court rejected both anticipatory bail applications filed by a father and son facing arrest in connection with a CGST and Central Excise investigation involving trading of pharmaceutical products. Evidence, including statements from dummy proprietors and chartered accountants, indicated their direct involvement in managing firms with suspicious transactions. The court found grounds for custodial interrogation, emphasizing the applicants' duty to honor summons and their link to non-genuine firms and fake invoices. The rejection was based on the detailed analysis of evidence and the applicants' actions, concluding no basis for granting anticipatory bail.

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Issues:
Apprehension of arrest in connection with Summons No. GEXCOM/AE/FU/672/2021-AE; Rejection of anticipatory bail applications.

Analysis:
1. The applicants, father and son, are facing arrest in connection with an investigation initiated by the office of Central Goods and Service Tax (CGST) and Central Excise regarding trading of pharmaceutical products by a firm. The investigation revealed fictitious firms and the active role of one of the applicants in business transactions. Statements and evidence collected point towards their involvement.
2. Despite summons and evidence indicating their involvement, the applicants did not respond and are now seeking anticipatory bail, claiming false implication. They argue that the CGST Act provides mechanisms for tax demands, emphasizing the need for proper procedures, natural justice, and quasi-judicial proceedings before any action.
3. The respondents oppose the bail applications, citing substantial evidence of the applicants' involvement in creating fake invoices and evading taxes worth crores. They highlight the applicants' influence on dummy persons, chartered accountants, and involvement in multiple firms with suspicious transactions.
4. The court examined the evidence, including statements from dummy proprietors, chartered accountants, and banking transactions, which point towards the applicants' direct involvement in managing several firms and engaging in questionable financial activities. The court found sufficient grounds for custodial interrogation, denying the anticipatory bail applications.
5. The court emphasized the duty of the applicants to honor summons under Section 70 of the Act, considering the evidence linking them to non-genuine firms, fake invoices, and significant financial transactions. The involvement of family members, correspondence with tax authorities, and admission of managing multiple firms further strengthen the case against the applicants.
6. Based on the detailed analysis of the evidence and the applicants' actions, the court concluded that no grounds for granting anticipatory bail exist, leading to the rejection of both applications.

Order:
Anticipatory Bail Application No.2267 of 2021 and Anticipatory Bail Application No.2269 of 2021 are rejected.

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