2025 (5) TMI 1977 - HC - GST

Petitioner granted regular bail in fraudulent Input Tax Credit case after serving 2 months custody

Arvind Kumar Versus Directorate General Of Gst Intelligence, Amritsar.

HC granted regular bail to petitioner accused of availing fraudulent Input Tax Credit through fake invoices. Court noted petitioner had already served 2 ... Seeking grant of regular bail - availing and utilization of fraudulent Input Tax Credit - fake/bogus invoices - already suffered incarceration for 2 months and 6 days - constitutional right of Article 21 - HELD THAT:- The details have been divulged by the counsel for the petitioner and also deposition has been made qua his role whereas certain other persons have been named by the petitioner who are being interrogated and on that account it would be unjust to deny the petitioner concession of regular bail who has suffered custody for more than 2 months whereas the interrogation qua other persons is underway, and as per the principle of the criminal jurisprudence, no one should be considered guilty, till the guilt is proved beyond reasonable doubt, therefore, detaining the petitioner behind the bars for an indefinite period would solve no purpose. The Apex Court rendered in “Dataram versus State of Uttar Pradesh and another” [2018 (2) TMI 410 - SUPREME COURT] wherein it has been held that the grant of bail is a general rule and putting persons in jail or in prison or in correction home is an exception. Therefore, to elucidate further, this Court is conscious of the basic and fundamental principle of law that right to speedy trial is a part of reasonable, fair and just procedure enshrined under Article 21 of the Constitution of India. This constitutional right cannot be denied to the accused as is the mandate of the Apex court in “Balwinder Singh versus State of Punjab and Another”[2024 (9) TMI 1744 - SC ORDER], Thus, the petitioner is directed to be released on regular bail on his furnishing bail and surety bonds to the satisfaction of the trial Court/Duty Magistrate, concerned. The petition in the aforesaid terms stands allowed. Issues Presented and ConsideredThe core legal questions considered by the Court in this matter were:Whether the petitioner, accused under Section 132(1) of the CGST Act, 2017 read with relevant provisions of the Punjab GST Act, 2017 and Section 20 of the IGST Act, 2012, is entitled to regular bail pending trial.Whether the petitioner's alleged involvement in availing and utilizing fraudulent Input Tax Credit (ITC) invoices amounting to Rs. 18.22 crores justifies denial of bail.The applicability of the principles of criminal jurisprudence regarding presumption of innocence and the general rule favoring grant of bail in the context of the petitioner's incarceration period and the stage of investigation.The relevance of the petitioner's antecedents, role in the offence, recovery of incriminating material, and the status of co-accused persons in deciding the bail application.The constitutional right of the accused to a speedy trial under Article 21 of the Constitution and its bearing on the grant of bail.Issue-wise Detailed Analysis1. Entitlement to Regular Bail under GST and Related LawsThe petitioner was arrested under Section 132(1) of the CGST Act, 2017, which deals with offences related to fraudulent availment or utilization of Input Tax Credit. The legal framework governing this offence includes the CGST Act, Punjab GST Act, and IGST Act, which collectively impose stringent penalties for tax evasion and fraud. The Court had to examine whether the gravity of the allegations-fraudulent ITC of Rs. 18.22 crores-precluded grant of bail.The Court noted that while the allegations are serious, the petitioner had already undergone incarceration for over two months, and the main accused had been granted bail by another High Court. The petitioner's antecedents were clean, and no incriminating material was recovered from his premises. The petitioner's counsel had disclosed details of his role and identified other persons involved who were still under investigation.The Court applied the principle that bail is the general rule and jail is the exception, as enshrined in criminal jurisprudence and reinforced by authoritative precedents. It emphasized that the presumption of innocence remains intact until guilt is proven beyond reasonable doubt. Thus, prolonged detention without trial or conclusive evidence would be unjust.2. Application of Criminal Jurisprudence Principles on BailThe Court extensively relied on the Supreme Court's decision in 'Dataram versus State of Uttar Pradesh,' which elucidates the fundamental postulate that an accused is presumed innocent until proven guilty. The judgment underscores that the grant of bail is the norm, and incarceration is an exception to be applied sparingly and judiciously.The Court highlighted several factors from the precedent that influence bail decisions:Whether the accused was arrested during investigation to prevent tampering with evidence or influencing witnesses.The accused's cooperation with the investigation and absence of absconding.The accused's antecedents and whether he is a first-time offender.The humanitarian considerations under Article 21 of the Constitution, including dignity of the accused and prison overcrowding.The legislative intent reflected in provisions like Section 436 and 436A of the Code of Criminal Procedure, 1973, which promote a lenient approach to bail.The Court observed that the petitioner's cooperation with the investigation and clean antecedents weighed in favor of bail. The absence of recovery from the petitioner's premises and the ongoing interrogation of other accused further supported this stance.3. Right to Speedy Trial and BailThe Court invoked the constitutional right to a speedy trial as an integral component of the right to life and personal liberty under Article 21. It cited the Apex Court's judgment in 'Balwinder Singh versus State of Punjab,' emphasizing that undue delay in trial infringes the accused's rights. The Court noted that prolonged incarceration without trial is detrimental and unjust.The Court quoted literary expression from Oscar Wilde's 'The Ballad of Reading Gaol' to poignantly illustrate the harshness of incarceration and the need to balance justice with humane treatment.4. Treatment of Competing ArgumentsThe State opposed bail on the ground of the serious nature of the offence and the large amount involved in the alleged fraud. However, the Court found that the petitioner was not the key conspirator but a lesser participant, as the main accused had already secured bail. The petitioner's clean antecedents, lack of incriminating recovery, and cooperation with the investigation diminished the risk of tampering with evidence or fleeing.The Court reasoned that continued detention would not serve any purpose and that the ongoing interrogation of other accused persons was a relevant factor favoring bail.Significant HoldingsThe Court held:'A fundamental postulate of criminal jurisprudence is the presumption of innocence, meaning thereby that a person is believed to be innocent until found guilty... the grant of bail is the general rule and putting a person in jail or in a prison or in a correction home... is an exception.''A humane attitude is required to be adopted by a judge, while dealing with an application for remanding a suspect or an accused person to police custody or judicial custody... maintaining the dignity of an accused person, the requirements of Article 21 of the Constitution and the fact that there is enormous overcrowding in prisons...''The right to speedy trial is a part of reasonable, fair and just procedure enshrined under Article 21 of the Constitution of India. This constitutional right cannot be denied to the accused.'The Court concluded that the petitioner had suffered sufficient incarceration and, given the circumstances, bail should be granted to uphold the principles of justice, fairness, and constitutional guarantees. It directed release on furnishing bail and surety bonds, clarifying that this order does not express any opinion on the merits of the case.