2023 (6) TMI 938 - HC - GST

Bail granted to accused charged under CGST Act for fraudulent credit through bogus invoices

Amit Gupta Versus Directorate General of GST Intelligence

The Allahabad HC granted bail to an accused charged under CGST Act for fraudulently availing fake credit through bogus invoices without actual supply of ... Seeking grant of bail - availing fake credit fraudulently - bogus invoices without supply of goods or services - HELD THAT:- The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him incarceration, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction. Therefore, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required is imperative. In Y.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION [2013 (5) TMI 896 - SUPREME COURT], the Hon'ble Supreme Court was dealing with allegations of offences which were punishable with upto life imprisonment, but in the present case, the maximum punishment that can be imposed upon the applicant is five years' imprisonment. Moreover, the offence is compoundable as per the provision contained in Section 138 of the CGST Act, sub-Section (1) whereof provides that 'Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case be, of such compounding amount in such manner as may be prescribed'. Analyzing the facts of the case in light of the law as explained in the case of Y.S. Jagan Mohan Reddy [2013 (5) TMI 896 - SUPREME COURT], Dataram Singh [2018 (2) TMI 410 - SUPREME COURT] and Satender Kumar Antil [2022 (8) TMI 152 - SUPREME COURT], it has to be taken into consideration that coaccused persons of the present case have already been enlarged on bail; charge-sheet/complaint has already been filed before the Trial Court; and, therefore, it cannot be said that now the applicant is in a position to influence the investigation of the case. Apart from the aforesaid facts, it is not disputed that the the applicant is languishing in jail since January, 2023 and that the maximum punishment that can be imposed upon the applicant is five years' imprisonment. Let the applicant- Amit Gupta be released on bail under Section 132(1)(c), 132(1) (2) and Section 132(1)(i) of the CGST Act, 2017 read with Section 69 of CGST Act, Department DGGI, Meerut on furnishing a personal bond and two heavy sureties each in the like amount to the satisfaction of the court below, subject to the conditions imposed - application allowed. Issues Involved:1. Legality of the applicant's arrest and detention.2. Applicant's entitlement to bail considering the nature of the offense and previous bail grants to co-accused.3. Impact of socio-economic offenses on bail decisions.Summary:1. Legality of the Applicant's Arrest and Detention:The applicant was arrested under Section 132(1)(c) of the CGST Act, 2017 for availing ineligible Input Tax Credit (ITC) of Rs. 46.54 crore based on bogus invoices without the supply of goods. The applicant argued that he was arrested without serving any notice under Section 41A of the Code of Criminal Procedure. The investigation revealed that the applicant admitted to managing the day-to-day affairs of the involved companies and that the suppliers were non-existent.2. Applicant's Entitlement to Bail Considering the Nature of the Offense and Previous Bail Grants to Co-Accused:The applicant has been in jail since January 19, 2023, and the charge-sheet has been filed. The applicant argued that most witnesses are government officials, reducing the likelihood of witness tampering. The co-accused have already been granted bail. The applicant cited previous similar cases where bail was granted, asserting his right to bail under similar conditions.3. Impact of Socio-Economic Offenses on Bail Decisions:The Union of India opposed bail, citing the applicant as an economic offender causing significant financial loss to the government. The Supreme Court's stance in State of Bihar Vs. Amit Kumar and Chhaya Devi Vs. Union of India was referenced, emphasizing that socio-economic offenses require a different approach due to their severe impact on society. However, the court noted that the maximum punishment is five years and the offense is compoundable under Section 138 of the CGST Act.Conclusion:The court acknowledged the seriousness of the offense but also considered the applicant's prolonged detention, the filing of the charge-sheet, and the bail granted to co-accused. Balancing these factors, the court granted bail to the applicant under specific conditions to ensure compliance and prevent tampering with evidence or influencing witnesses.