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of <h1>Alleged fake input tax credit claims u/s132(1)(c): long custody and near-complete probe lead to regular bail grant</h1> In a bail application for alleged illegal availment of input tax credit under s.132(1)(c) CGST Act, the HC held that continued custody was unwarranted ... Seeking grant of regular bail - illegal availment of ITC - Section 132(1)(c) of the Central Goods and Services Act, 2017 - HELD THAT:- It appears that the present applicant has been arrested in connection of the offence punishable under Section 132(1)(c) of the Central Goods and Services Act, 2017 for which punishment is five years of imprisonment. The applicant is arrested on 13.10.2023 and since then the applicant is in custody. The investigation appears to be virtually over. The case of the prosecution rests upon documentary evidence. All the documentary evidence and other material appears to have been seized by the Investigating Agency. Therefore, presence of the present applicant does not appear to be necessary for the purpose of investigation. The trial is not likely to commence and conclude in the near future. Considering the nature of allegations made in the FIR and without discussing the evidence in details as well as without going into details, prima-facie, this Court is of the opinion that this is a fit case to exercise the discretion to enlarge the applicant on bail. Hence, the application is allowed and the applicant is ordered to be released on bail in connection with the aforesaid FIR, on executing a bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions. Application allowed. Issues: Regular bail application under Section 439 of the Code of Criminal Procedure in connection with alleged offence under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017.Analysis:1. Reasons for Arrest and Legality:The applicant challenged the legality of the arrest, arguing that the arrest memo did not specify the Commissioner's reason to believe the applicant committed the alleged offence as required by law. It was highlighted that the authorization for arrest was signed by an Additional Commissioner of the Sales Tax Department, deemed illegal. The applicant's counsel contended that the investigation was complete, and the applicant's custody was unnecessary, urging for bail.2. Prosecution's Opposition:The prosecution opposed the bail application, emphasizing the seriousness of the charges and the applicant's alleged involvement in availing input tax credit illegally amounting to Rs.22 Crore. The prosecution maintained that the investigation was ongoing, citing the use of fake invoices to claim input tax credit without corresponding transactions.3. Court's Consideration and Decision:After hearing arguments from both sides and examining the case records, the Court noted the nature of the offence under Section 132(1)(c) of the CGST Act, punishable by imprisonment for up to five years. The Court observed that the investigation was nearly complete, relying on documentary evidence seized by the Investigating Agency. It was determined that the applicant's presence for further investigation was unnecessary, and the trial was not imminent.4. Grant of Bail and Conditions:Considering the circumstances and without delving into detailed evidence, the Court exercised discretion to grant bail to the applicant. The applicant was ordered to be released on bail upon executing a bond of Rs.10,000 with specific conditions. These conditions included refraining from tampering with evidence, maintaining law and order, providing proof of residence, surrendering passport if applicable, and not leaving India without court permission.5. Final Directions and Observations:The Court directed the authorities to release the applicant only if not required in connection with any other offence. Breach of bail conditions empowered the Sessions Judge to take appropriate action. The trial Court was instructed not to be influenced by the prima facie observations made in the bail order. The ruling was made absolute, allowing for direct service of the judgment.This detailed analysis encapsulates the legal arguments, considerations, and the Court's decision regarding the regular bail application in connection with the alleged GST offence, providing a comprehensive overview of the judgment.
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