2024 (5) TMI 545 - HC - GST

Regular bail granted for fraudulent Input Tax Credit case under CGST Act Sections 132(1)(b) and 132(1)(c)

Vishal Rai Versus Union of India and Others

The P&H HC granted regular bail to a petitioner charged with fraudulent passing of Input Tax Credit without actual supply of goods under Sections ... Grant of Regular Bail - fraudulent passing of Input Tax Credit without actual supply of goods - violation of provisions of Section 132(1) (b) and 132(1)(c) of the CGST Act - HELD THAT:- This Court has arrived at the conclusion that the petitioner deserves to be released on bail in the present case. No doubt, the respondents have levelled specific allegations against the present petitioner, yet, the criminal liability of the petitioner is yet to be decided by the trial Court during the course of trial. Still further, the petitioner was arrested in the present case on 07.01.2023 and the maximum sentence provided under the statute is five years. Still further, the case of the prosecution is based on the testimonies of official witnesses and the petitioner may not be in a position to influence the witnesses, who are to be produced by the prosecution before the trial Court. Even otherwise, the petitioner cannot be confined in jail as an under-trial for an indefinite period. The present petition is allowed and the petitioner is ordered to be released on bail on his furnishing bail bonds/surety bonds to the satisfaction of the learned trial Court/Duty Magistrate/CJM concerned subject to the conditions imposed. Issues Involved:1. Bail application u/s 439 of Cr.P.C. in a complaint case under Sections 132(I) (b) & (c) of CGST Act, 2017.2. Allegation of fraudulent passing of Input Tax Credit without actual supply of goods.3. Petitioner's custody for over a year and two months pending trial.Summary:The petitioner filed a bail application u/s 439 of Cr.P.C. seeking relief in a complaint case under Sections 132(I) (b) & (c) of CGST Act, 2017. The petitioner was accused of fraudulent passing of Input Tax Credit without actual supply of goods, leading to the alleged violation of CGST Act. The petitioner, a petty businessman, denied the allegations, claiming innocence and lack of involvement in any tax evasion activities. The petitioner's counsel argued that the trial process might be prolonged due to the nature of the offence and the petitioner's custody for over a year and two months.The respondents opposed the petitioner's submissions, contending that there was sufficient evidence to establish the petitioner's violation of the CGST Act. The Court considered the arguments presented by both parties and reviewed the records in detail.Referring to the principles laid down by the Hon'ble Supreme Court of India in bail applications, the Court emphasized that the purpose of bail is to ensure the accused's appearance at trial, not as a form of punishment. The Court highlighted the importance of balancing the accused's rights with the interests of society while granting bail.After careful consideration, the Court concluded that the petitioner should be granted bail in the case. Despite specific allegations against the petitioner, the Court noted that the criminal liability was yet to be determined during the trial. The Court also took into account the maximum sentence under the statute and the prosecution's reliance on official witnesses. The Court emphasized that the petitioner's release on bail was necessary, as indefinite pre-trial detention was not justified.Consequently, the Court allowed the petition and ordered the petitioner's release on bail, subject to various conditions to ensure compliance and appearance before the trial court. The conditions included restrictions on influencing witnesses, attendance at court hearings, surrendering of passport if applicable, and notification of any change in residence or contact details. Additionally, the Court permitted the imposition of further conditions by the trial court, if deemed necessary, while accepting the bail bonds and surety bonds.