2023 (4) TMI 496 - HC - GST

Accused granted bail in Rs.88.33 crore input tax credit fraud case with Rs.5 crore deposit condition

Shri Mohammed Ali Akram Khan Son Of Mohammed Iqbal Khan Versus Union Of India, Through The Superintendent, Cgst, Jaipur, Union Of India, Through P.P

Rajasthan HC granted bail to accused in tax evasion case involving input tax credit fraud of Rs.88.33 crores. Court noted economic offenders should not be ... Seeking grant of bail - Input tax credit - whether economic offender should be dealt as a general offender? - HELD THAT:- It is an admitted position that petitioner had evaded the tax and got the benefit of input tax credit of nearing Rs.88.33 Crores. Hon’ble Apex Court in various pronouncement observed that economic offender should not be dealt as a general offender and in circumstances while granting bail to Vinay Kant Ameta directed him to deposit Rs.200 Crores. Taking into account the facts and circumstances of the case and without expressing any opinion on the merits of the case, this court deems it just and proper to enlarge the petitioner on bail with a condition to deposit Rs.5 Crores by the petitioner before the respondent Department ‘under protest’ - the bail application under Section 439 Cr.P.C. is allowed and it is ordered that the accused-petitioner Shri Mohammed Ali Akram Khan Son Of Mohammed Iqbal Khan be enlarged on bail provided he furnishes a personal bond in the sum of Rs.50,000/- with two sureties of Rs.25,000/- each to the satisfaction of the learned trial court with the stipulation that he will appear before the trial court on all subsequent dates of hearing and as and when called upon to do so. Bail application allowed. Issues Involved:- Bail application under Section 439 Cr.P.C. for offences under Sections 132 (1) (b), (f), (h), (j) & (l) of Central Goods and Services Tax Act, 2017.Summary:The petitioner filed a bail application under Section 439 Cr.P.C. in relation to a complaint for various offences under the Central Goods and Services Tax Act, 2017. The petitioner claimed innocence and argued that he was wrongly implicated, emphasizing that the main accused was someone else. The petitioner highlighted the lack of prior notice before arrest and the lengthy trial process as reasons for seeking bail.The petitioner cited several judgments in support of the bail application, emphasizing cases where bail was granted in similar circumstances. The respondent, however, opposed the bail application, alleging that the petitioner and a co-accused were involved in creating fake firms to claim input tax credit benefits amounting to a substantial sum. The respondent argued that economic offences should be treated differently and cited cases where significant deposits were required for bail.After considering the arguments from both sides, the court acknowledged the gravity of the economic offence committed by the petitioner involving a substantial amount of input tax credit. Citing previous court decisions, the court determined that economic offenders should be treated differently. Consequently, the court granted bail to the petitioner on the condition that he deposits Rs.5 Crores with the respondent Department 'under protest'. The court also imposed additional bail conditions, including a personal bond and sureties, emphasizing the requirement for the petitioner to appear before the trial court as scheduled.In conclusion, the court allowed the bail application under Section 439 Cr.P.C., ordering the petitioner to deposit a significant sum before being released on bail, with strict compliance with the specified conditions set by the court. The trial court was directed to record the deposition of the required amount by the petitioner before accepting the bail bonds.