2019 (2) TMI 2114 - HC - GST

Anticipatory bail granted to petitioners charged under Section 132(1)(b) GST Act for fake invoice tax evasion

Shravan A. Mehra and Ors. Versus Superintendent of Central Tax, Anti-evasion, GST Commissionerate

Karnataka HC granted anticipatory bail to petitioners charged under Section 132(1)(b) of GST Act for allegedly obtaining invoices without goods delivery ... Seeking grant of bail - allegation is that petitioners have obtained Invoices from the Company of the respondent without delivery of the goods and thereby evaded payment of tax and they have committed an offence under Section 132(1)(b) of G.S.T. Act - HELD THAT:- The maximum punishment provided under the Act is five years and fine and if that is taken into consideration, the magnitude of the alleged offence and it is not punishable with death or imprisonment for life. Even as per the said provision, the alleged offence is also compoundable with the Authority, who has initiated the said proceedings. The only consideration which the Court has to consider while releasing the petitioners on anticipatory bail is, that whether the petitioners can be secured for the purpose of investigation or for the purpose of trial. Under such circumstances, it is felt that by imposing stringent conditions if the petitioners are ordered to be released on anticipatory bail, it would meet the ends of justice. Under the similar facts and circumstances this Court in Crl.P. No. 979/2019 connected with Crl.P. No. 980/2019, after considering the issue has released the accused therein. In that light also the accused herein are entitled to be released on anticipatory bail. The petitioners - Mr. Shravan A. Mehra and Mr. Anil K. Mehra are ordered to be released on anticipatory bail in the event of their apprehension or arrest in O.R. No. 40/2018-19 filed under Section 132 of G.S.T. Act, subject to the fulfilment of conditions imposed - bail application allowed. Issues:1. Bail application under Section 438 of Cr.P.C. for an offence under Section 132 of the Central Goods and Services Tax Act.2. Consideration of anticipatory bail for petitioners accused of obtaining fake invoices without actual supply of goods to evade tax.3. Analysis of the alleged offence under Section 132 of the G.S.T. Act and the applicable punishment.4. Arguments presented by the senior counsel for the petitioners and the standing counsel for the GST Commissionerate.5. Examination of the investigation findings and potential impact on the economy due to false trading practices.6. Review of relevant sections of the G.S.T. Act - Sections 132, 138, and 139.7. Comparison with a previous judgment granting anticipatory bail under similar circumstances.8. Decision and conditions imposed for granting anticipatory bail to the petitioners.The judgment by Hon'ble Judge B.A. Patil pertains to two bail petitions filed under Section 438 of Cr.P.C. by the petitioners seeking release on bail in a case involving an offence under Section 132 of the Central Goods and Services Tax Act. The petitioners were accused of obtaining invoices without actual goods delivery to evade tax. The senior counsel for the petitioners argued that no offence was committed as tax was paid based on the invoices and highlighted the compoundable nature of the offence under the G.S.T. Act. Conversely, the standing counsel contended that false trading practices could harm the economy and opposed bail, citing ongoing investigation and the risk of tampering with evidence. The judge analyzed the severity of the offence under Section 132 and noted that the maximum punishment is imprisonment for five years and a fine, emphasizing the compoundable nature of the offence. Referring to a prior judgment, the judge granted anticipatory bail to the petitioners, subject to stringent conditions, including a personal bond, cooperation in the investigation, and restrictions on leaving the country or engaging in similar criminal activities. The judge disposed of related applications accordingly.