2024 (9) TMI 1289 - HC - GST

Bail denied in fake GST firm case using stolen Aadhaar PAN cards for forgery worth crores

Rajiv Jindal Versus State of U.P.

The Allahabad HC rejected bail applications in a forgery case involving creation of fake GST firms using stolen Aadhaar and PAN cards. The court ... Seeking grant of bail - forgery - territorial jurisdiction - creation of fake forms - Admissibility of confessional statements - HELD THAT:- This Court is of the opinion that the present case is of a forgery and not related to GST, therefore, no benefit of bail granted in the aforesaid case can be given in the present case. The inquiry has been defined under Section 2(g) of Cr.P.C. to mean every inquiry, other than trial, conducted by a Magistrate or a Court. It would also be appropriate to understand the meaning of ‘investigation’ which has been defined under Section 2(h) Cr.P.C. as all the proceedings for collection of evidence conducted by a police officer - ‘Trial’ has not been defined under the Code of Criminal Procedure, 1973. Lexicologically, ‘trial’ means a judicial examination of a case in accordance with law. Hence, for an inquiry or trial, it is the court which is the focal point, whereas for an investigation, it is the police officer. Thus, in the present case, the arguments as placed by learned counsel for the applicants, on the point of jurisdiction, have no legs to stand. Section 27 of the Indian Evidence Act, 1872 deals with the relevancy of information received from a person accused of any offence while in the custody of the police officer. The Section provides an exception to the general rule that confessions made to the police officers are inadmissible in evidence. From the aforesaid, the scope of Section 27 of the Act, 1872 is that it applies to any information given by the person accused of an offence, which leads to the discovery of a fact - The condition for applicability of the aforesaid Section is that the person giving the information must be an accused in police custody. The information provided must lead directly to the discovery of the material fact and only that portion of information which directly leads to the discovery is admissible. For example, if an accused, while in custody, reveals the location of a weapon used in the crime and upon searching that location, the weapon is indeed found, the part of statement where accused described the location of weapon is admissible in courts as evidence. In the present case, after registration of the FIR when forgery had been done by using the Aadhaar Card and PAN Card of the informant, fake GST firms were registered, Investigating Officer proceeded on the information as provided by a secret informer and arrested two accused who disclosed about the office where work of the firm was being done. On the aforesaid information of the arrested accused persons, the Investigating Officer reached the office premises, wherein he found other persons working for the firm of the arrested accused persons. Laptops, mobiles, SIM Cards, fake invoices were recovered, thus, discovering such fact which connected them with the main accused who had got registered the fake firms and the consequential forgery or theft of GST was found. Thus, that part of the discovery of fact is admissible as per Section 27 of the Act. Therefore, argument as placed by learned counsel for the applicants regarding the fact that confessional statements can be taken as a piece of evidence, has no legs to stand. The present case relates to economic offences, such as large scale fraud, money laundering and corruption, are often viewed seriously because they affect the economic fabric of the society. The Courts may deny bail in such cases especially if the accused holds a position of influence or power. In the present case, money trail of crores, which affects the society at large scale, is involved which started from registration of fake firms by using Aadhaar and PAN Cards of the informant who had not applied for such registration. In the present case from the report of the concerned District Judge/ Chief Judicial Magistrate, it is clear that the accused have avoided coming to the court and discharge application of one of the accused has been rejected. One or the other grounds are being taken by the accused persons in getting the matter adjourned so that the charge is not framed, therefore, they are trying to cause deliberate delay so that the charges may not be framed, hence, interfering in judicial process, thus, giving ample reason of not enlarging them on bail. As assisted by the State that backbone of Goods Services Tax regime and Input Tax Credit, is that under the GST Regime ITC follows supply chain not only in intra-state but also interstate supply. Thus, on the ground of jurisdiction as argued by learned counsel for the applicant this Court is of the view that though registration of fake firms were at Punjab and Maharasthra, the complainant is resident of New Delhi and the FIR has been lodged at Gautam Buddh Nagar, the genuineness of complaint questioning the territorial jurisdiction cannot be raised on the basis of occurrence as the same cannot be said to be at one place where the GST firm was registered but its connections with other fake firms are also required to be seen. This is not a fit case for granting bail - bail applications are rejected. Issues Involved:1. Jurisdiction of the court.2. Admissibility of confessional statements.3. Nature and gravity of the offence.4. Evidence against the applicants.5. Delay in trial and framing of charges.6. Consideration of bail in economic offences.7. Specific arguments for individual applicants.Issue-wise Detailed Analysis:1. Jurisdiction of the court:The applicants argued that the FIRs were lodged outside the jurisdiction of the concerned police station. The court referred to Section 77 of Cr.P.C., which states that every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed. It was held that the arguments on jurisdiction have no legs to stand as the GST firms' connections and the complainant's identity are linked to Gautam Buddh Nagar.2. Admissibility of confessional statements:The court discussed Section 27 of the Indian Evidence Act, 1872, which deals with the relevancy of information received from a person accused of any offence while in police custody. It was emphasized that only the part of the statement that leads directly to the discovery of facts is admissible. The court found that the confessional statements leading to the discovery of fake GST firms and other incriminating materials are admissible.3. Nature and gravity of the offence:The court highlighted that the case involves economic offences with a large-scale fraud affecting the public at large. The Supreme Court has held that economic offences need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole. The court referred to the case of Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation, which emphasized the gravity of economic offences and the need for a different approach in the matter of bail.4. Evidence against the applicants:The court examined the evidence collected during the investigation, including the recovery of laptops, mobile phones, SIM cards, fake invoices, and other incriminating materials from the accused. The court found that the evidence collected establishes the involvement of the applicants in the commission of the offence. The court also noted that the chargesheets have been submitted against the accused, and the discharge application of one of the accused has been rejected.5. Delay in trial and framing of charges:The applicants argued that there has been an inordinate delay in framing charges and that they are entitled to bail under Section 437(6) Cr.P.C. The court found that the delay in framing charges is due to the accused avoiding coming to court and causing deliberate delay. The court emphasized that the applicants are trying to interfere with the judicial process, providing ample reason not to grant bail.6. Consideration of bail in economic offences:The court reiterated that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The court referred to several Supreme Court judgments, including Nimmagadda Prasad v. Central Bureau of Investigation, which outlined important factors to be considered while granting bail in economic offences. The court concluded that the applicants' involvement in a large-scale fraud affecting the public at large justifies the denial of bail.7. Specific arguments for individual applicants:The court addressed the specific arguments raised by individual applicants, including the lack of direct evidence, false implication, and the benefit of Section 437 Cr.P.C. for female applicants. The court found that the evidence collected, including confessional statements and recoveries, establishes the involvement of the applicants in the commission of the offence. The court also noted that the benefit of Section 437 Cr.P.C. can be given to women who do not have agency and not to those connected with powerful persons involved in offences affecting the public at large.Conclusion:The court rejected the bail applications, emphasizing the gravity of the economic offences, the evidence collected, and the applicants' attempts to interfere with the judicial process. The court held that granting bail in such cases would perpetuate illegality and affect the public trust in the judicial system.