2022 (6) TMI 423 - HC - GST

Bail Granted to Applicant in GST Fraud Case After Extended Custody Due to Insufficient Evidence Under Sections 132 CGST Act

The HC granted bail to the applicant charged under Sections 132(1)(b), 132(1)(c), and 132(10)(i) of CGST Act, 2017 for alleged fraudulent ITC claims ... Seeking grant of Bail - allegation of registration of fake firms with the GST Department - non-existent firms or not - HELD THAT:- The illicit transactions which led to fake Input Tax Credit claims to be processed have also not been disclosed. The applicant is not a beneficiary of any illicit transaction. The applicant cannot be linked with the illicit transactions. The determination of the tax liability of the applicant has not been finalized. There are merit in the submissions of learned counsel for the applicant and accordingly hold that the applicant is entitled to be enlarged on bail - the applicant is entitled to be enlarged on bail - bail application allowed. Issues: Bail application under Sections 132(1)(b), 132(1)(c), and 132(10)(i) CGST Act, 2017 for Case Crime No. 01 of 2021 at Police Station New Mandi District Muzaffar Nagar.Analysis:- The applicant filed a bail application seeking release in a case involving Sections 132(1)(b), 132(1)(c), and 132(10)(i) of the CGST Act, 2017 at DGGI Dehradun Zonal Unit. The applicant had been in jail since 29.09.2021, and the bail was earlier rejected by the Sessions Judge.- The applicant's counsel argued that the applicant was wrongly accused of creating fake firms for fraudulent Input Tax Credit (ITC) claims. It was contended that the applicant was not involved in any illicit transactions and was not a beneficiary of any wrongdoing. The counsel highlighted the lack of evidence linking the applicant to the alleged fake firms.- The State's counsel could not effectively counter the applicant's submissions. It was acknowledged that the applicant had no prior criminal record apart from this case. The court found merit in the applicant's arguments and granted bail without delving into the case's merits.- The court ordered the release of the applicant on bail upon furnishing a personal bond and sureties, imposing conditions to prevent tampering with evidence, influencing witnesses, or obstructing the legal process. Breach of these conditions could lead to bail cancellation upon the prosecution's application.This judgment from the Allahabad High Court granted bail to the applicant, emphasizing the lack of concrete evidence linking the applicant to the alleged fraudulent activities. The court's decision was based on the applicant's clean criminal record, lack of finalized tax liability determination, and the absence of proof connecting the applicant to the illicit transactions. The court's order for bail was subject to strict conditions to ensure the integrity of the legal process and prevent any interference with evidence or witnesses.