2022 (10) TMI 502 - HC - GST

Petitioner granted regular bail in fake CA certificate case for GST refund fraud

The HC granted regular bail to petitioner charged with issuing fake CA certificates for GST refund. Court noted investigation was complete, challan filed, ... Seeking grant of regular bail - allegation of issuing fake CA certificates for refund of GST - there is no allegation that the petitioner is in any way the beneficiary of the excess Input Tax Credit, allegedly received by the companies - HELD THAT:- In the present case the investigation has been completed and the challan stands presented; petitioner is stated to be not the beneficiary; he is not involved in any other case; he is in custody since 17.5.2022; nothing is to be recovered from him; there are a total of 21 PWs; it is a Magisterial trial, which is yet to commence; thus, further incarceration of the petitioner behind bars would not serve any useful purpose, the present petition for grant of regular bail deserves to be allowed. The instant petition is allowed. The petitioner is ordered to be released on regular bail, subject to his furnishing bail/surety bonds amounting to Rs.10 lakhs to the satisfaction of trial Court/Duty Magistrate concerned and subject to him not being required in any other case. Issues:Grant of regular bail under Section 439 Cr.P.C. in a case registered under Section 132(1)(i) read with Section 132(1)(b)(c)(e)(f) of the Central Goods and Services Tax Act, 2017.Analysis:The petitioner, a registered Chartered Accountant, sought bail, emphasizing that he shared information with a co-accused for a CA certificate issuance without his knowledge. The investigation is complete, and no recovery is needed from the petitioner. The petitioner has been in custody since his arrest, and the trial involving 21 prosecution witnesses is pending. The petitioner is not alleged to benefit from the offense, and certain bank accounts have been frozen. The petitioner relied on a judgment where bail was granted in a similar case, emphasizing the completion of investigation and challan presentation.The respondent opposed bail, citing the department's loss and ongoing investigations. However, certain bank accounts have been frozen, and some companies refunded amounts. The respondent referred to judgments highlighting the seriousness of economic offenses and the need to consider the gravity of the offense while granting bail. The Supreme Court's stance on bail as the rule and refusal as the exception was emphasized. The court noted that each bail decision depends on the case's facts and circumstances, balancing personal liberty and preventing crime.The court considered various judgments, including those where bail was denied due to ongoing investigations. The court highlighted the need to complete investigations promptly and observed that bail decisions should be case-specific. In the present case, where the investigation is complete, the petitioner is not a beneficiary, and trial is pending, continued incarceration serves no purpose. The court allowed the petition for regular bail, subject to conditions to ensure the petitioner's cooperation and appearance in court.The court ordered the petitioner's release on regular bail upon furnishing bail/surety bonds, with specified conditions to prevent tampering with evidence, intimidating witnesses, or committing similar offenses. The court warned of bail cancellation if conditions were violated. The court clarified that the observations made were for bail adjudication purposes only and not a final opinion on the case's merits. The court also addressed the handling of a report from a Handwriting Expert and emphasized that the trial would proceed independently of the bail order.