2025 (3) TMI 1390 - HC - GST

Anticipatory bail under Section 438 CrPC granted where GST records show no loss to State and full cooperation

HC allowed the petition for anticipatory bail in a case alleging financial misconduct impacting the State exchequer. The court noted that no loss was ... Seeking grant of anticipatory bail - involvement in financial misconduct and the subsequent impact on the State Exchequer - HELD THAT:- Considering the fact that the petitioner has not caused any loss to the State Exchequer as he has been filing GST returns on time, with the purchases made by him and his firm accurately reflected in the vendor's GST R-1 Return, as well as in the GST 2-A and 3-B returns and all due taxes have been paid promptly and the fact that the petitioner is ready and willing to join the investigation and cooperate with the investigating officer concerned, as has been averred in para No.16 of the present petition, this Court is of the considered view that the petitioner deserves the concession of anticipatory bail at this stage. The petitioner is directed to be released on anticipatory bail subject to fulfilment of conditions imposed - bail application allowed. ISSUES PRESENTED and CONSIDEREDThe primary legal issue considered in this judgment is whether the petitioner is entitled to anticipatory bail under Section 482 of the Bhartiya Nyaya Sanhita (BNS) in connection with FIR No.007, dated 31.01.2025, which includes allegations under Sections 318, 319, 336, 337, 338, 340, and 61 of the BNS 2023 and Section 132 of the Central Goods and Services Tax Act (CGST), 2017. The core questions revolve around the petitioner's alleged involvement in financial misconduct and the subsequent impact on the State Exchequer.ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents:The legal framework involves the application of Section 482 of the BNS, which provides the High Court with inherent powers to make orders necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice. Additionally, Section 132 of the CGST Act pertains to offenses related to tax evasion and fraudulent activities concerning GST compliance.Court's interpretation and reasoning:The Court considered the petitioner's compliance with GST regulations, including the timely filing of returns and accurate reflection of transactions in the GST R-1, 2-A, and 3-B returns. The Court noted the absence of any fraudulent activity or forgery of documents, as contended by the petitioner. The Court emphasized the petitioner's willingness to cooperate with the investigation, which weighed in favor of granting anticipatory bail.Key evidence and findings:The evidence presented included the petitioner's consistent filing of GST returns and the absence of any specific role attributed to him in the alleged financial misconduct. The petitioner maintained that the transactions were accurately reported and that all due taxes were paid, thereby negating the claim of causing a loss to the State Exchequer.Application of law to facts:The Court applied Section 482 of the BNS to assess the appropriateness of granting anticipatory bail. Given the petitioner's compliance with GST obligations and his readiness to participate in the investigation, the Court found no immediate threat of non-cooperation or flight risk. This compliance with legal obligations and willingness to cooperate were crucial in the Court's decision to grant anticipatory bail.Treatment of competing arguments:The prosecution opposed the bail, arguing that the petitioner caused a significant financial loss to the State. However, the Court found the petitioner's evidence of compliance and cooperation persuasive. The absence of concrete evidence of forgery or fraudulent intent further weakened the prosecution's stance against granting bail.Conclusions:The Court concluded that the petitioner deserves the concession of anticipatory bail, given his compliance with GST regulations and willingness to cooperate with the investigation. The Court imposed conditions to ensure the petitioner's availability for interrogation and to prevent any potential interference with the investigation.SIGNIFICANT HOLDINGSThe Court held that the petitioner is entitled to anticipatory bail, subject to conditions ensuring cooperation with the investigation. The Court emphasized the importance of compliance with GST regulations and the absence of fraudulent activity as critical factors in its decision. The petitioner is required to join the investigation within a week, failing which the bail order will be automatically canceled.Core principles established:The judgment reinforces the principle that compliance with statutory obligations and willingness to cooperate with investigations are pivotal in considering anticipatory bail applications. The Court underscored the necessity of balancing the interests of justice with the rights of individuals against whom allegations are made.Final determinations on each issue:The Court determined that the petitioner had not caused any loss to the State Exchequer and had fulfilled his GST obligations. The anticipatory bail was granted with specific conditions to ensure the petitioner's cooperation with the investigation and prevent any potential interference with the judicial process.