TaxTMI 
TaxTMI 
2025 (10) TMI 1327
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....proprietary concern of the petitioner were engaged in availment of fraudulent Input Tax Credit (ITC ) during the period from financial year 2017-18 to 2020-21, on account of eight fake firms created and operated by one Baljinder Singh @ Gopan and his accomplices. Searches were conducted by DGGI in the month of October, 2021 at the premises of the above named firms and a show cause notice was issued on 31.07.2024 under Section 74 of CGST Act. During independent investigation carried by Anti-Evasion Branch of CGST Commissionerate, searches were conducted during the month of July, 2025 at the premises of above named firms and it was revealed that both these firms were engaged in availment of fraudulent Input Tax Credit (ITC) on account of bogus invoices without actual supply of goods, issued by M/s New Vasan Electric Company and cancelled supplies, thereby causing wrongful loss to the Government Exchequer during the period from financial years 2019-2020 to 2024-2025. The petitioner was found involved in fraudulent availment/utilization of ITC through receipts of bogus invoices worth Rs. 48.92 Crores in violation of provisions of Section 132(1)(c) of CGST and had evaded tax to the tune....
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.... Rs.3.95 Crores only. The petitioner is in custody since 03.07.2025. The investigation and trial would take considerable time. The subject offences are triable by the Magistrate. He does not have any criminal antecedents. He has permanent abode of business. The case rests upon documentary evidence and there are no chances of petitioner's tampering with the same. The maximum punishment to be awarded to him in case of conviction is 05 years. He is ready to abide by the terms and conditions to be imposed upon him. With these broad submissions, it is, urged that the petition deserves to be allowed and he deserves to be released on bail. In support of his arguments, learned counsel for the petitioner has relied upon the authorities cited as Ratnambar Kaushik vs. Union of India, 2022 INSC 1254, Ashutosh Garg vs. Union of India, 2024 (105) GST 572, Vipin Garg alias Bindu vs. State of Haryana, 2023(69) GSTL 3, Yash Goyal vs. Union of India, Criminal Appeal No. 2784 of 2024, decided on 28.06.2024, Deepak Sharma vs. State of Punjab, 2024NCPHHC 104729, Parteek Das Gupta vs. State of Haryana, 2024 NCPHHC 46670, Amit Bansal vs. State of Haryana, 2024 NCPHHC 19173, Tejpal Singh vs. Director G....
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....undred lakh rupees, with imprisonment for a term which may extend to three years and with fine; (iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine; 7. A bare perusal of the above mentioned provision leaves no room to doubt that the offences alleged carry minimum punishment of 06 months and a maximum punishment of 05 years of imprisonment. Further, Section 138 of the CGST Act is relevant, as per which, the offences under Section 132 of the Act are compoundable. 8. The law regarding grant of bail has been discussed in several pronouncements of Hon'ble Supreme Court. It will be apposite to refer to some of them. Reference can firstly be made to Dataram Singh vs. State of U.P. and another, (2018)3 SCC 22, wherein Hon'ble Supreme Court had reiterated the law of bail as follows: "2. A fundamental postulate of criminal jurisprudence is the presumption of innocence, meaning thereby that a person is beli....
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.... the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required. X XXX XXX 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI." 10. Similar observations were made by Hon'ble Supreme Court in P. Chidambar....
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....132(5) of the CGST Act. While observing that the alleged evasion of tax by the accused was to the extent as provided under Section 132(1)(i) and the punishment provided was imprisonment which might extend to 05 years and fine, the fact that the accused had already undergone incarceration for 04 months and completion of trial was likely to take time and further that the evidence to be tendered was of documentary nature, the Hon'ble Supreme Court had passed an order for release of the accused on bail. In Ashutosh Garg's case (supra), the High Court of Judicature for Rajasthan at Jaipur had dismissed the prayer made by the petitioner, who was accused of creating and operating 294 fake firms and evaded tax liability of Rs.1032 crores. The Hon'ble Supreme Court allowed the Special Leave Petition filed by the accused by taking into consideration the fact that he was in custody for a period of 09 months and that the offence carried maximum punishment for 05 years of imprisonment. It was observed that it was not appropriate to keep him in custody any further. 13. Further, in Vipin Garg alias Bindu's case (supra), there was allegation of misuse of ITC leading to loss of State exchequer. ....
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....03.07.2025. Nothing has been shown to this Court which may justify the further detention of the petitioner in prison. 16. On consideration of the above discussed facts and circumstances and also considering that the alleged offences are punishable with maximum punishment up to 05 years and also keeping in view that in such circumstances, the further detention of the petitioners may not at all be justified since in case of this nature, the evidence to be rendered by the respondent would essentially be documentary and electronic, which will be through official witnesses, due to which, there cannot be any apprehension of tampering, intimidating or influencing the witnesses and further as it appears justified to strike a fine balance between the need for further detention of the petitioner when no custodial interrogation has been claimed at all by the department, this Court considers that the petitioner is entitled to be released on bail but subject to certain conditions. 17. As a result of above discussion, the petition moved by the petitioner is hereby allowed and he is ordered to be released on regular bail on his furnishing personal bonds with two sureties in the like amount ....