2022 (4) TMI 399 - DSC - GST

Tax consultant gets default bail in GST input credit fraud case after detention deemed unwarranted

Murtuza Jabirbhai Tinwala Versus Director General of GST Intelligence, Through Shri Onkar Nath, Senior Intelligence Officer, Pune Zonal Unit, Pune

Murtuza Jabirbhai Tinwala Versus Director General of GST Intelligence, Through Shri Onkar Nath, Senior Intelligence Officer, Pune Zonal Unit, Pune - TMI Issues:Bail application under Section 439 of Cr.P.C for offenses under Central Goods and Service Tax Act, 2017.Analysis:1. The applicant sought bail, claiming innocence and lack of involvement in the alleged offenses. He argued that he was merely an employee working as an accountant for the concerned enterprises and had no connection to the fraudulent activities. The investigation was almost complete, and no further discoveries were expected from him. Moreover, the main accused were already out on bail, and the applicant had cooperated with the investigating agency.2. The respondent, Directorate General of GST Intelligence (DGGI), Pune Zonal Unit, opposed the bail application, alleging that the applicant was an active participant in the fraud scheme. They claimed that the applicant, despite being a tax consultant, was involved in generating fake invoices to pass illegal Input Tax Credit, defrauding the government of legitimate GST revenue. The prosecution argued that the applicant's role was significant and that he might influence witnesses if released on bail.3. The defense argued that the applicant acted upon the instructions of the main accused and should not be held solely responsible. They cited legal provisions and judgments to support the claim that as a tax consultant, the applicant's liability was limited. The defense also emphasized that the main accused had already been granted bail.4. The judge considered the arguments from both sides and reviewed the prosecution's evidence. It was noted that the applicant had been in custody since his arrest, and the investigation primarily relied on documentary and digital evidence already collected. The judge found no grounds for further detention, especially since no formal accusations had been made against the applicant in the form of an FIR or complaint.5. Considering the nature of the evidence, the applicant's background, and the absence of criminal antecedents, the judge granted bail to the applicant. The bail was subject to specific conditions, including a personal recognizance bond, solvent sureties, restrictions on influencing witnesses or tampering with evidence, surrendering the passport, and cooperating with the investigating officer.6. The judge referred to various legal precedents cited by both parties in reaching the decision to grant bail to the applicant. The order allowed the applicant to be released on bail upon fulfilling the specified conditions, ensuring his compliance with the legal requirements and preventing any potential interference with the ongoing investigation.