2022 (4) TMI 824 - HC - GST

Female Petitioners Granted Bail in GST Fraud Case After 8 Months in Custody Under Section 132 of CGST Act

The HC granted regular bail to female petitioners accused under Section 132 of CGST Act, 2017 for involvement in fraudulent input tax credit schemes ... Seeking grant of Regular Bail - availment of inadmissible input tax credit - fake invoices - Section 132 of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017 - HELD THAT:- Without commenting anything as regards the merits of the case but while keeping in view that all the three petitioners are ladies and have been behind bars for a substantial period of about 8 months whereas the maximum sentence as may be imposed is 5 years, further detention of the petitioners will not be justified. The petitioners are ordered to be released on regular bail on their furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned. - petition allowed. Issues:Grant of regular bail in proceedings initiated under Section 132 of the Central Goods and Services Tax Act, 2017.Analysis:The petitioners sought regular bail in proceedings initiated by Superintendent (Anti-Evasion) CGST, Commissionerate Ludhiana under Section 132 of the Central Goods and Services Tax Act, 2017, along with Section 20 of the Integrated Goods and Services Tax Act, 2017. The accusations involved the creation and operation of bogus firms by an individual for fraudulent activities related to input tax credit. The petitioners, who are ladies, claimed they were unaware of the activities conducted on their behalf and that their involvement was due to small allurements. The defense argued that there was no evidence to show personal benefit from the alleged amounts received as input tax credit. The defense further highlighted the provision of a maximum 5-year sentence under Section 132 of the Act and the petitioners' already spent 8 months in custody, requesting the concession of regular bail, especially considering their gender and health conditions.The respondent opposed the petition, emphasizing that a significant amount of approximately Rs. 31,48,04,523 had been misappropriated from the State exchequer by all the accused, including the petitioners. The respondent contended that due to their involvement in the misappropriation, the petitioners did not deserve the concession of regular bail. After considering the arguments from both sides, the Court acknowledged the petitioners' gender and the duration of their custody, which exceeded the potential maximum sentence of 5 years. The Court concluded that further detention of the petitioners would not be justified, leading to the acceptance of the petition and ordering the release of the petitioners on regular bail upon furnishing bail bonds/surety bonds to the satisfaction of the trial court or relevant authorities.