2025 (4) TMI 307 - HC - GST

Regular bail granted in GST evasion case for supply without invoices and e-way bills

Sh Shah Mohammad Rana Versus Union of India

HC allowed regular bail for accused in GST evasion case involving supply of goods without invoices and e-way bills. Court noted investigation was complete ... Seeking grant of regular bail - evasion of GST by supplying goods without invoices and e-way bills - HELD THAT:- This Court finds that the complainant, i.e. DGGI Meerut received a secret information that various firms are involved in sale and purchase of goods without invoices and e-way bills and to gather the truth, premises of Mr. Ashutosh (co-accused) and Vikalp Jain (co-accused) were searched. At the time of search activities, nothing incriminating was found at the residence of Vikalp Jain, whereas electronic devices recovered from the house of Mr. Ashutosh, prima facie, revealed the commission of above mentioned crime. Further, during the course of hearing, it has been fairly stated by Mr. Parv Agarwal, learned counsel for Union of India that Mr. Ashutosh is neither an accused nor a prosecution witness, as the list of witnesses consisting of 16 names attached with the complaint/charge sheet does not include the name of Mr. Ashutosh. That apart, the case of the prosecution is based upon the documentary evidence, wherein the investigation is also complete., but concededly, the charges against the accused have not yet been framed so far, therefore, it is clear that the trial is yet to commence, which is likely to consume considerable time to conclude, as the prosecution has to examine 16 witnesses. Admittedly, the alleged offences are triable by Magistrate and carry a maximum punishment of five years. The prosecution witnesses are mostly official witnesses and at present there does not appear to be any possibility of their being won over, therefore, considering the above background as well as the fact that the co-accused of the applicant has already been released on bail, the applicant also deserves the same concession. Conclusion - The applicant–Shah Mohammad Rana shall be released on regular bail in the case subject to his furnishing the requisite bail bonds and surety bonds to the satisfaction of the trial court and subject to fulfilment of conditions imposed. Bail application allowed. 1. ISSUES PRESENTED and CONSIDEREDThe primary legal issues considered in this judgment include:Whether the applicant, Shah Mohammad Rana, is entitled to regular bail under Section 439 of the Code of Criminal Procedure, given the allegations of GST evasion against him.The sufficiency and relevance of the evidence presented against the applicant, particularly the statements and electronic evidence seized during the investigation.The applicability of the legal framework under Sections 132(1)(a) and 132(1)(i) of the Central Goods and Services Tax Act, 2017, in determining the severity of the alleged offenses.Whether the applicant's case is comparable to that of a co-accused who has already been granted bail, and if so, whether this warrants the granting of bail to the applicant.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Entitlement to Regular BailRelevant legal framework and precedents: The application for bail is considered under Section 439 of the Code of Criminal Procedure, which allows the court to grant bail to an accused person in custody. The court must weigh the nature of the offense, the evidence presented, and the likelihood of the accused interfering with the investigation or fleeing from justice.Court's interpretation and reasoning: The court noted that the investigation was complete, and the charges had not yet been framed, suggesting that the trial would take considerable time to conclude. The court also considered the nature of the alleged offenses, which are economic in nature and carry a maximum punishment of five years.Key evidence and findings: The prosecution's case is primarily based on documentary evidence, including statements made by Mr. Ashutosh and the alleged confession by the applicant. However, the court noted that Mr. Ashutosh is neither an accused nor a prosecution witness.Application of law to facts: The court applied the principles of bail jurisprudence, considering the completion of the investigation, the likelihood of the applicant's cooperation, and the absence of any immediate threat to the integrity of the trial process.Treatment of competing arguments: The prosecution argued against bail due to the seriousness of the economic offenses. However, the court found the applicant's case comparable to that of a co-accused who had been granted bail, thereby justifying similar treatment.Conclusions: The court concluded that the applicant should be granted bail, subject to conditions to ensure his presence at trial and adherence to legal obligations.Issue 2: Evidence Against the ApplicantRelevant legal framework and precedents: The admissibility and weight of evidence, particularly statements recorded under Section 70 of the CGST Act, are crucial in determining the bail application.Court's interpretation and reasoning: The court acknowledged that the evidentiary value of the statements and electronic evidence would be tested during the trial. The court also noted that the applicant's alleged confession and the statements of Mr. Ashutosh did not conclusively implicate the applicant in the initial stages of the investigation.Key evidence and findings: The court highlighted the absence of direct evidence linking the applicant to the alleged offenses in the early statements of Mr. Ashutosh, which did not mention M/s Rana Steels India Pvt. Ltd.Application of law to facts: The court considered the lack of immediate and direct evidence against the applicant as a factor favoring the grant of bail.Treatment of competing arguments: The prosecution's reliance on the fourth statement of Mr. Ashutosh was countered by the defense's argument regarding the absence of the applicant's firm's name in earlier statements.Conclusions: The court found that the evidence presented did not warrant continued detention of the applicant, especially given the completion of the investigation and the applicant's cooperation.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'The trial court would test the evidentiary value of these statements during trial, when the prosecution discharges the onus.'Core principles established: The court emphasized the principle of parity in bail considerations, noting that the applicant's case was on par with that of a co-accused who had been granted bail. The court also highlighted the importance of assessing the sufficiency of evidence and the stage of the investigation in bail decisions.Final determinations on each issue: The court determined that the applicant should be released on regular bail, subject to furnishing requisite bail and surety bonds to the satisfaction of the trial court. The court also directed the applicant to abide by the terms and conditions of bail imposed by the trial court.