2022 (4) TMI 348 - HC - GST

Bail Granted to Accused in GST Fraud Case After 48 Days in Custody; Investigation Complete

A. Satya Sainath Versus The State of Telangana

The HC granted bail to Accused No.2 in a GST fraud case (Crime No. 179/2020) involving charges under Sections 406, 420, 465, 468, and 471 IPC. After 48 ... Seeking grant of Bail - failure to file to file GSTR3B till date - indulging in fraudulent transactions by issuing tax invoices to the registered persons enabling them to utilize the input tax credit by filing Form GSTRIO - non-discharge of tax liability resulting in loss of revenue to State and Central exchequer - HELD THAT:- Taking into consideration the fact that this crime was registered in 2020; petitioner has been languishing in jail from the last 48 days, and police have already sought custody of the petitioner for a period of four days, this Court deems it appropriate to grant bail, on certain conditions. Petitioner – Accused No.2 shall be enlarged on bail on his executing a personal bond for a sum of ₹ 20,000/- with two sureties for a like sum each to the satisfaction of XII Additional Chief Metropolitan Magistrate, Nampally - petition allowed. Issues Involved:Bail application under Sections 437 and 439 Cr.P.C. for Accused No.2 in Crime No. 179 of 2020 involving offenses under Sections 406, 420, 465, 468, and 471 IPC.Detailed Analysis:1. Prosecution's Allegations:The prosecution alleged that M/s Palani Constructions, represented by Sri Anthony Raj, engaged in fraudulent activities related to GST filings. The complaint stated that the company filed GSTR-1 return for January 2020 but did not file subsequent returns. Investigations revealed discrepancies in the office address, contact information, and rental agreements. Anthony Raj was accused of submitting false documents to obtain GST registration, showing substantial turnovers without fulfilling tax liabilities. The company issued invoices but failed to file necessary returns, leading to misuse of input tax credit and causing revenue loss to the State and Central exchequer.2. Petitioner's Defense:The petitioner, Accused No.2, filed a bail application through counsel, citing his arrest in November 2021 and subsequent judicial custody. The defense argued that the investigation had been ongoing for over a year, and the petitioner had been in custody for 48 days. It was emphasized that the prosecution possessed all relevant evidence, minimizing the risk of tampering. Additionally, the petitioner's health issues were highlighted as a factor warranting bail consideration.3. Prosecution's Response:The Assistant Public Prosecutor contended that the accused had defrauded multiple individuals, and investigations were still in progress. Although acknowledging the registration of another case against the petitioner, the prosecutor did not contest the bail application based on custody requirements.4. Court's Decision:Considering the prolonged incarceration of the petitioner since 2020, the court granted bail with specific conditions. The court noted the extended custody period and the absence of a significant risk of evidence tampering. Accused No.2 was directed to execute a personal bond of Rs. 20,000 with two sureties of the same amount each. Compliance with the Investigating Agency was mandated as a condition for bail.In conclusion, the High Court of Telangana, under the jurisdiction of Hon'ble Smt. Justice Lalitha Kanneganti, allowed the Criminal Petition, thereby granting bail to Accused No.2 in connection with Crime No. 179 of 2020. The judgment balanced the petitioner's prolonged detention with the need for cooperation in the ongoing investigation, ensuring accountability while addressing health concerns and custody duration.