Businessman Gets Anticipatory Bail in GST Fraud Case After Depositing Rs. 1 Crore Against Rs. 7.36 Crore Demand

The HC granted ad-interim anticipatory bail to the applicant in a GST fraud case involving alleged sale invoice manipulation. The applicant had already deposited Rs. 1 crore against a demand of Rs. 7.36 crore and maintained a clean record. Bail was granted on a personal bond of Rs. 50,000 with two sureties, subject to conditions including availability for interrogation, non-interference with witnesses, and travel restrictions. The Court directed the opposing party to file a counter affidavit within four weeks, while allowing the investigation to proceed independently. The applicant must submit the order to relevant authorities within ten days.

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Issues: Application for anticipatory bail under Section 70 of the Central Goods and Services Tax Act, 2017 in connection with alleged fraud in sale invoice (ITC) Income-tax Credit Certificate.

Analysis:
The applicant filed for anticipatory bail in connection with a case under Section 70 of the Central Goods and Services Tax Act, 2017, regarding an alleged fraud in a sale invoice. The applicant's counsel argued that no final adjudication had been made regarding the nature of the allegation, and a demand of Rs. 7.36 crore was raised, out of which Rs. 1 crore had already been deposited. The applicant, described as having a clean record, had been cooperating with the GST Act proceedings, with no coercive process issued against him. The counsel emphasized that custodial arrest was unnecessary, but there was a looming threat of arrest. Hence, the applicant sought the protection of anticipatory bail to safeguard his liberty during the case's pendency.

The opposite party's counsel vehemently opposed the anticipatory bail application, highlighting the economic nature of the alleged offence and its impact on the Union's revenue. The Court, after hearing both sides and examining the record, deemed the matter deserving of consideration. The opposite party was directed to file a complete counter affidavit within four weeks, with the applicant given two weeks to file a rejoinder affidavit. The case was listed for further orders after the specified period.

In the event of arrest, the Court granted the applicant ad-interim anticipatory bail upon furnishing a personal bond of Rs. 50,000 with two sureties each. Specific conditions were imposed, including making the applicant available for police interrogation, refraining from influencing witnesses, seeking court permission before leaving India, and depositing the passport if held. Non-compliance with the conditions could lead to the Investigating Officer or Govt. Advocate seeking cancellation of the anticipatory bail. The Investigating Officer was instructed to expedite the investigation independently and conclude it in accordance with the law, disregarding any observations made by the Court during the bail application.

Additionally, the applicant was directed to present a copy of the order to the relevant authorities within ten days if the investigation was ongoing, ensuring compliance with the Court's directives. The order emphasized the verification of its authenticity from the official website of the High Court Allahabad, with a requirement for a written declaration of such verification by the concerned Court/Authority/Official.

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