2024 (1) TMI 918 - HC - GST

Applicant granted regular bail in GST evasion case involving illegal Input Tax Credit claims despite large-scale financial allegations

SAJJAD @ S.M. LANGDA MOHAMMAD HUSAIN RAVJANI Versus STATE OF GUJARAT

Gujarat HC granted regular bail to applicant charged with GST evasion through illegal Input Tax Credit claims involving large-scale financial ... Seeking grant of regular bail - availing illegal Input Tax Credit by entering into large scale financial transactions - HELD THAT:- The allegation against the applicant is regarding the evasion of GST, but no procedure is initiated by the the GST department against the present applicant under the provisions of the GST Act. Without discussing the evidence in detail, this Court, prima facie, is of the opinion that, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, present application is allowed and the applicant is ordered to be released on regular bail subject to condition imposed - bail application allowed. Issues involved: Application for regular bail u/s 439 of CrPC in connection with FIR for offences u/s 409, 419, 465, 467, 468, 471, 120(B) and 34 IPC.Summary:1. The applicant sought regular bail under Section 439 of the CrPC for offenses under various sections of the IPC related to GST evasion and financial transactions. The applicant was not directly implicated in the FIR, and the charge sheet lacked concrete evidence linking the applicant to the alleged offenses. The defense argued that there was no proof of the applicant's involvement in illegal activities such as availing or passing on illegal Input Tax Credit. The defense also contended that the applicant had not forged any documents for GST registration or bank account opening, thus challenging the basis of the charges against the applicant.2. The defense further highlighted that the applicant had not received any Show Cause Notice under the GST Acts and no actions had been initiated against the applicant under the said Acts. It was argued that the charges of criminal breach of trust and forgery were not substantiated by the evidence presented in the charge sheet. The defense emphasized that the police lacked the authority to investigate tax evasion offenses under the GST Acts. The defense urged the court to grant regular bail to the applicant based on these grounds.3. On the other hand, the State contended that the offenses charged were serious and had caused substantial damage to the government exchequer. The State argued that the gravity of the offense and the societal impact warranted denying bail to the applicant. However, the court considered various factors, including the applicant's prolonged incarceration, completion of investigation, and absence of GST departmental actions against the applicant, to exercise discretion in favor of granting regular bail.4. Considering the facts and circumstances, the court decided to grant regular bail to the applicant upon execution of a personal bond and surety. The court imposed specific conditions on the applicant, such as not misusing liberty, surrendering passport, marking presence before the police station monthly, and not leaving the country without permission. The court also emphasized that the observations made during bail should not influence the trial court's judgment. The ruling allowed for modification of conditions by the trial court as per legal requirements.5. The court directed the release of the applicant unless required in connection with other offenses, with provisions for appropriate action in case of condition breaches. The bail bond was to be executed before the lower court, with the option for the court to adjust conditions as per legal provisions. The ruling was made absolute, allowing for direct service of the order.