TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1422
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....firm, namely M/S Om Sai Traders and Suppliers, it was indicated that the Firm was engaged in trading of grains by showing exempted supply in monthly GST returns(GSTR-3B) as well as in GSTR - 2A. By analysing the bank accounts, it was observed that transactions from different Firms mainly dealing in trade of scrap was shown in the accounts. Whereas many of such Firms were Suo motu cancelled by GST department on account of being fake/non-existent Firms. Fictitious transactions were shown to have taken place from such fake/non-existent firms. During course of investigation, as many as 19 accounts were searched by DGGI, carrying huge transaction amounting to Rs. 1800 crores in last 1-2 years and quite suspiciously there were cash transactions of around 800 crores. 3. While making further searches under Section 67 (2) of the CGST Act, 2017, it was found that one of such non-existent firm, namely M/S Suraj trading company was also actively involved in such fake and sham transactions. While tracing the address of search firm, it was formed that address of one premises belonging to Shri Vivek Garg was given in the record. When statements of Shri Vivek Garg were recorded by DGGI, he inform....
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....m, where the petitioners and other persons were sitting and abruptly arrested the petitioner. Even the reason of arrest was not disclosed to the petitioner. Thereafter, they created summons under CGST Act, on providing PAN card by the petitioner, requiring the petitioner to appear in the office of DGGI Jaipur unit on 01.06.2024 at 11 AM and the petitioner was directed to sign the same. However, copy of the summons was not given to him, nor was he allowed to inform to his family/ friends. Then they took the petitioner as well as Shri Rajesh Goyal along with them from Delhi to DGGI office, Jaipur, through one vehicle Innova. 8. Shri S.S. Hora, learned Counsel for the accused-petitioner would submit that although the accused-petitioner was illegally arrested on 31st May 2024, yet he was not produced before the concerning Magistrate within 24 hours of his arrest and in order to validate such unconstitutional act, on papers his arrest has been shown on 3rd June 2024. On 3rd June 2024 itself, the accused-petitioner was produced before the Magistrate alongwith an application for seeking remand of the accused-petitioner, which was allowed by the concerned Court ignoring the defence put fo....
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....r is not involved in commission of any offence. 14. Learned counsel for the accused-petitioner submits that although the accused-petitioner is a law-abiding citizen and an ordinary businessman with no criminal antecedents, yet he has been selectively targeted. Furthermore, the entire case is based on documentary evidence, which is already in the possession of the investigating agency and has already been filed before the trial Court, hence, no further investigation is warranted in the case. The accused-petitioner is said to be cooperating with the authorities and undertakes to remain available for the trial. There is no likelihood of his absconding; nor of fleeing from the process of justice. Hence, he prayed for enlarging the accused-petitioner on bail. 15. In order to press his submissions, learned counsel for the accused-petitioner has relied upon the judgments delivered by Hon'ble Supreme Court in the cases of Vineet Jain v/s Union of India (Criminal Appeal No. 2269/2025, decided on 28.04.2025), Ashutosh Garg v/s Union of India (SLP (Crl.) No. 8740/2024 decided on 26.07.2024), Ratnambar Kaushik v/s Union of India (2023) 2 SCC 621, Yash Goyal v/s Union of India (Criminal Appea....
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.... be investigated. Remand Application was allowed by the concerned Court. 17. Learned counsel for the DGGI also submitted that alleged validity of arrest proceedings are already under scrutiny of this Court in the above referred Criminal Writ Petition, where a detailed reply to the writ petition on behalf of DGGI has been filed categorically denying the allegations levelled by the accused-petitioner. 18. Learned Counsel for DGGI also highlighted that the alleged economic offence is of a grave magnitude involving evasion of Rs. 704 Crores, striking at the very core of India's tax administration. He also emphasized that the fraud was not an isolated event but part of a well-engineered conspiracy to defraud the Government exchequer, thereby undermining the integrity of the indirect tax regime. The accused-petitioner is a pivotal figure in a nexus of interlinked entities created solely to facilitate this large-scale tax evasion. 19. Learned counsel for DGGI further added that prosecution's case, as emerging from the complaint filed by the Department, would specifically point out that the accused-petitioner, through a network of dummy firms and fictitious invoices, orchestrated a ....
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.... 23. Learned Counsel for DGGI has also placed before the Court that much before registration of the case in question against the accused-petitioner, on 23.08.2021, an FIR was lodged against the accused-petitioner bearing Cr. No.3/2021, by the Cyber Crime Office Perambalur for committing an offence under Section 66D of the Information Technology Act, 2000 and Section 420 of IPC. He was arrested and kept in judicial custody for more than 32 days and thereafter, he was enlarged on bail vide order dated 05.09.2022 passed by the Court of Principal District & Sessions Judge, Perambalur in Criminal Misc. Petition No. 2037/2022. While referring concealment of the aforesaid Criminal Case by the accused-petitioner in the Bail Application, learned counsel for DGGI would submit that discretionary remedy of bail may not be extended to a person, who has not come out with clean hands before the Court and has mischievously suppressed the relevant fact. 24. While pressing the submissions with regard to questionable conduct of the accused-petitioner, learned counsel for the DGGI has also submitted that during custody of the accused-petitioner and during pendency of the instant bail application, he ....
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....al submissions made at the Bar and considered the record. 28. Bare reading the complaint would reveal that there are serious allegations against the accused-petitioner of creation of at 353 fake/non-existing Firms with an intent to pass on fake ITC on the basis of alleged supply shown in fake invoice and thereby passing on fake ITC to various beneficiaries. Magnitude of such fake ITC and tax evasion is also quite high around Rs. 704 Crores, which is likely to affect the economy to a great extent. Offences alleged against the Petitioners evidently fall within the purview of economic offences. 29. Hon'ble Supreme Court has repeatedly held that economic offences constitute a distinct class of crime. In Y.S. Jagan Mohan Reddy (supra.), the Apex Court observed as under:- "Economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole." 30. Similarly, in Nimmagadda Prasad (supra.), the Apex Court underscored that economic offences are more serious than ordinary crimes because they involve deliberate design with an eye on personal profit regardless ....
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....l Courts, the accused should get bail unless there are some extra ordinary circumstances. By setting aside the impugned order dated 24th January, 2025 of the High Court of Judicature for Rajasthan, Bench at Jaipur, we grant bail to the appellant. The appellant shall be immediately produced before the Trial Court and the Trial Court shall enlarge him on bail on appropriate terms and conditions till the conclusion of the trial." (Emphasis supplied) 35. Fair reading of the judgment in the case of Vineet Jain (supra.) would reveal that the aforesaid judgment does not confer absolute right of Bail upon an accused facing allegations under CGST Act, despite the offence being triable by Magistrate and the maximum prescribed punishment for such offence is five years. The aforesaid precedent indeed aids in interpreting CGST bail jurisprudence, but it is also clear that its principles apply when "no extraordinary facts" counterbalance the presumption in favour of bail. Two exceptions can apparently be spelt out from the apparent judgment delivered by the Hon'ble Apex Court, which are as under:- (i) Person having criminal antecedents can be denied bail. (ii) In a matter involving ext....
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....highlighted above, conduct of the petitioner does not confer any right upon him to pray for bail in the instant case. 39. In the instant case, conduct of the accused-petitioner would in itself dis-entitle him from seeking relief of bail, as he has not only suppressed the facts regarding his antecedents, which are evidently having material bearing at the time of consideration of bail, but admittedly he has also made a serious attempt to flee away from the custody during pendency of the instant Bail Application by using his influence and power. Hence, in the light of above possibility of his absconding and influencing the witnesses can not be ruled out. 40. It is a settled position in law that the conduct of the accused is a relevant and significant consideration in deciding a bail application, especially in cases involving economic offences, which are considered grave and affecting public interest at large. The Hon'ble Supreme Court in State of Maharashtra v. Sitaram Popat Vetal (supra.), clearly laid down that apart from the gravity of the offence, the court must also examine the conduct of the accused during investigation and prosecution. Which can certainly provide valuable ins....