2022 (7) TMI 296 - DSC - GST

Bail denied for accused charged under Section 132(1)(b)(c) and 16(2)(b) of CGST Act for economic offences

Durga Madhab Panda Versus Commissioner CGST, Gurugram

The DC Gurugram dismissed the bail application for an accused charged under Section 132(1)(b)(c) read with 16(2)(b) of the CGST Act, 2017. The court held ... Seeking grant of Bail - causing a loss to Government Exchequer - economic offences - offence under section Section 132(1)(b)(c) read with 16(2)(b) of the CGST Act, 2017 which is punishable under Section 132(1)(i) of the CGST Act, 2017 - HELD THAT:- It is settled preposition of law that economic offences in itself are considered to be gravest offence against the society at large and hence are required to be treated differently in the matter of bail. It seems that the entire community would aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. Further, if a murder committed in the heat of moment upon passing being aroused, the economic offence is supposed to be committed with cool calculation and deliberately with an eye on personal profit regardless of the consequence of the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. Reliance can be placed in the case of STATE OF GUJARAT VERSUS SHRI MOHANLAL JITAMALJI PORWAL AND ANOTHER [1987 (3) TMI 111 - SUPREME COURT] where it was held that The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the powers of the Court under Section 391 of the CrPC. Bail application dismissed. Issues Involved:1. Validity of arrest under Section 437 of Cr.P.C.2. Allegations of fraudulent activities under Section 132(1)(a)-(d) of CGST Act, 2017.3. Compliance with procedural requirements for arrest under GST Act.4. Grounds for granting or denying bail.5. Conduct and role of the prosecution department.Detailed Analysis:1. Validity of Arrest under Section 437 of Cr.P.C.:The applicant was arrested on 07.05.2022 by the GST authorities for alleged offences under Section 132(1)(a)-(d) of the CGST Act, 2017. The applicant argued that the arrest was mechanical and without proper procedure, thus making it bad in law. The prosecution countered that the arrest was justified based on credible information and voluntary admission by the applicant regarding his involvement in fraudulent activities.2. Allegations of Fraudulent Activities under Section 132(1)(a)-(d) of CGST Act, 2017:The applicant was accused of availing Input Tax Credit (ITC) fraudulently by using fake invoices and non-existent firms. The prosecution provided detailed tables showing the chain of fake/bogus firms and the amount of ITC involved, amounting to Rs. 16,48,39,656/-. The applicant's firm was found non-existent at the registered addresses, and the applicant admitted to availing ITC on the basis of goods-less invoices.3. Compliance with Procedural Requirements for Arrest under GST Act:The applicant contended that the arrest violated procedural requirements, including the issuance of a show-cause notice and an opportunity for hearing. The prosecution argued that the investigation was ongoing and that the show-cause notice would be issued upon completion. The court noted that the applicant's arrest was based on credible material and voluntary admission, making the procedural objections less significant.4. Grounds for Granting or Denying Bail:The applicant presented several grounds for bail, including his law-abiding nature, lack of criminal antecedents, and the impact of arrest on his business. The prosecution argued that the applicant's release could hamper the investigation and that he was a flight risk. The court cited precedents emphasizing the seriousness of economic offences and the need for stringent measures. It concluded that the applicant did not deserve bail due to the gravity of the offences and the potential impact on the investigation.5. Conduct and Role of the Prosecution Department:The court observed that the prosecution department appeared to have acted in a haphazard manner, suggesting possible collusion with the accused. It directed the Commissioner, CGST, Gurugram, to ensure a fair and impartial investigation, highlighting the need for accountability within the department.Conclusion:The bail application of the applicant was dismissed. The court emphasized the seriousness of economic offences and the need for a thorough investigation. The prosecution department was directed to conduct a fair and impartial investigation, reflecting the court's concern over the handling of the case by the authorities.