Anticipatory bail denied in alleged GST refund fraud; applicant called main accused for non-cooperation under Section 70 CGST

HC rejected the applicant's plea for anticipatory bail in an alleged GST refund fraud involving bogus firms and unclaimed exports to Dubai. The court noted material indicating the applicant was the main accused, based on statements of co-accused and evidence of sales and purchases through about 25 fictitious firms. The applicant's non-appearance despite three summons under Section 70 CGST Act weighed against relief. Relying on SC precedent that economic offences with deep-rooted conspiracies and huge public loss are grave, HC held no case was made for anticipatory bail and dismissed the application.

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Issues involved:
The judgment involves issues related to arrest under section 132 of the Central Goods and Service Tax Act, 2017, compliance with guidelines for arrest, cooperation with investigation, issuance of summons under Section 70 of the CGST Act, establishment of fake firms for GST refunds, gravity of economic offences, and grant of anticipatory bail.

Arrest and Investigation:
The applicant, a proprietor of two firms, was apprehensive of arrest in a case involving GST refund fraud. He was added as an accused in an FIR, arrested, and later released on bail due to a compromise. The non-applicant sought his formal arrest for interrogation, but the applicant moved the High Court instead of appearing before the GST Investigation Wing.

Compliance with Guidelines:
The applicant argued that the non-applicant was attempting to arrest him without following the guidelines issued by the Revenue Department, GST Investigation Wing. He expressed readiness to cooperate with the investigation and emphasized that his arrest was not mandatory under section 132 of the CGST Act.

Establishment of Fake Firms for GST Refunds:
The non-applicant alleged that the applicant was involved in forming fake firms to claim GST refunds amounting to a substantial sum. Evidence suggested that the applicant orchestrated the creation of multiple bogus firms for fraudulent GST refund purposes, implicating several individuals in the scheme.

Gravity of Economic Offences and Anticipatory Bail:
Considering the gravity of the offence involving substantial GST refunds through fake firms, the court dismissed the anticipatory bail application. Citing the seriousness of economic offences and the need for a different approach in bail matters, the court emphasized the importance of preventing threats to the financial health of the country.

Conclusion:
In light of the evidence gathered, the non-appearance of the applicant before the GST Investigation Wing, and the gravity of the offence involving fake firms for GST refunds, the court dismissed the anticipatory bail application, highlighting the severity of economic offences and the need to safeguard public funds and the economy.

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