2023 (5) TMI 590 - HC - GST

Bail Granted in GST Evasion Case: Insufficient Evidence and Disproportionate Custody Weigh Against Continued Detention Under CGST Act

HC granted bail to petitioner in GST evasion case under CGST Act, finding arrest premature and evidence insufficient. Court emphasized bail does not ... Seeking concession of regular bail - sale of Resin in cash, without issuing tax invoices - evasion of tax - HELD THAT:- The petitioner is accused for the commission of offences under CGST Act, which are triable by the Magistrate and the maximum punishment prescribed for the alleged offences is upto 5 years, which would be dependent on the quantum of tax evasion. The trial is at the stage of pre-charge evidence, hence, there is no likelihood of the trial concluding in the near future. Therefore, further incarceration of the petitioner in the aforesaid facts and circumstances would serve no useful purpose. Accordingly, the present petition is allowed. The petitioner be admitted to bail to the satisfaction to the trial Court/Duty Magistrate concerned. Issues involved:The petitioner seeking regular bail in a case u/s 132(1)(A) & (I) of Central Goods and Services Tax Act, 2017.Details of the judgment:1. The petitioner argued that they were falsely implicated as no cash or Agriculture Grade Urea was found. The arrest was deemed premature as tax liability assessment had not begun.2. The case relied heavily on the statement of Manoj Kumar, who was not presented as a witness, diminishing the statement's evidentiary value. The Department assumed tax evasion based on flawed calculations.3. The petitioner's custody since 26.04.2022 for offenses triable by a Magistrate warranted bail, especially considering the maximum punishment of five years, dependent on tax evasion amount.4. The respondent argued that the petitioner used Urea to produce Resin, sold without tax invoices, causing a significant GST loss.5. The Court acknowledged the trial stage and the potential delay, granting bail to the petitioner for offenses triable by a Magistrate, emphasizing that this decision does not reflect on the case's merits.