2024 (2) TMI 996 - HC - GST

HC denies bail in GST fraud case involving forged invoices and irregular input tax credit worth Rs. 20.96 crores

Ashish Bansal Versus Union of India Senior Intelligence Officer, Through Director General of G.S.T. Intelligence, Raipur

The HC denied regular bail to an applicant involved in GST fraud involving forged invoices and irregular input tax credit of Rs. 20,96,89,839/-. The court ... Seeking grant of regular bail - availment of irregular credit - invoices have been issued without any underlying supply of goods - HELD THAT:- From the documents placed before this Court by learned counsel for non-applicant, it is reflecting that applicant was served with notice under Section 70 of the Act of 2017 and during investigation, non-applicant has found applicant involved in creating forged invoices availing input tax credits to the tune of Rs. 20,96,89,839/-. Mere fact that applicant is in jail since 7.2.2023 cannot be a ground to enlarge him on bail, particularly when there is submission of learned counsel for non-applicant that investigation is still going on. Hon'ble Supreme Court in case of NIMMAGADDA PRASAD VERSUS CENTRAL BUREAU OF INVESTIGATION [2013 (5) TMI 920 - SUPREME COURT] observed that Taking note of all these aspects, without expressing any opinion on the merits of the case and also with regard to the claim of the CBI and the defence, we are of the opinion that the appellant cannot be released at this stage, however, we direct the CBI to complete the investigation and file charge sheet(s) as early as possible preferably within a period of four months from today. Further, in SANDEEP GOYAL VERSUS UNION OF INDIA [2020 (5) TMI 240 - SC ORDER] the Hon'ble Supreme Court even after considering the submission of learned counsel for applicant therein that applicant is in jail for last one year and eight months; some of accused persons are released on bail, has refused to grant bail to applicant taking note of the fact that investigation is not complete, and disposed of SLP observing that the State shall make endeavour to complete the investigation within specified period. In the case at hand also, the applicant is involved in the economic offence, investigation is still going on. The present is not a fit case to allow application of applicant for grant of regular bail and it is, accordingly, rejected. Issues Involved:- Application for grant of regular bail under Section 439 of CrPC- Allegation of offence under Section 16, 132 (1) (b) & 132 (1) (c) of the Goods and Service Tax Act, 2017Issue 1: Application for Grant of Regular BailThe applicant filed an application seeking regular bail under Section 439 of CrPC, as he has been in custody since 7.2.2023 in connection with a case registered under Section 16, 132 (1) (b) & 132 (1) (c) of the Goods and Service Tax Act, 2017. The prosecution alleged that the applicant, a common partner in three partnership firms, engaged in fraudulent activities involving forged invoices and availing input tax credit, resulting in an alleged tax evasion of Rs. 6.75 Crore. The applicant contended his innocence, completion of interrogation/investigation, and willingness to deposit the alleged tax amount once finalized. However, the non-applicant opposed the bail application, citing ongoing investigations, the seriousness of the offence, and the risk of evidence tampering. The Court noted the seriousness of economic offences, the need for a different approach to bail in such cases, and the importance of completing investigations before considering bail applications.Issue 2: Allegation of Offence under GST ActThe prosecution's case against the applicant involved allegations of creating forged invoices and availing input tax credits through three partnership firms, causing a loss of Rs. 20,96,89,839. The non-applicant argued that the applicant intentionally engaged in fraudulent activities at a national level, affecting the economy. The Court considered the gravity of economic offences, the ongoing investigation, and the risk of evidence tampering when evaluating the bail application. It referred to previous judgments emphasizing the seriousness of economic offences and the need for a cautious approach to bail in such cases.ConclusionAfter hearing arguments from both parties and reviewing the case documents, the Court found that the investigation was still ongoing, and the seriousness of the economic offence warranted a cautious approach to bail. The Court rejected the application for regular bail, citing the need to complete the investigation and the gravity of the allegations against the applicant.