TaxTMI 
TaxTMI 
2025 (12) TMI 813
X X X X Extracts X X X X
X X X X Extracts X X X X
....e allegation against petitioners is that they created/setup an elaborate network of 34 firms in the name of family members, 30 of which were bogus firms, created solely for the purpose of generating fake invoices and passing fraudulent Input Tax Credit. However, 4 firms were engaged in some legitimate business activities. Even these 4 firms have availed fraudulent ITC from non-existent/fake firms. It has been alleged that petitioners defrauded the State Exchequer of approximately Rs.81.61 crores and passed on ITC amounting to Rs.78.97 crores approximately. In the complaint filed by the complainant-department, it has been averred that on the basis of intelligence received by the Additional Director General, Directorate General of GST Intelligence, Ludhiana, regarding suspicious firms, investigation was initiated against the firms that were involved in availing and passing of Fraudulent Input Tax Credit. In the complaint, the details of the firms have been mentioned. It was noticed that these suspected firms were in the name of family members and using the IDs of others persons. Further all the suspicious firms were non-existent, same electricity bill/meter number with modified pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re punishable with imprisonment which may extend to maximum period of 05 years, lenient view deserves to be taken in their favour by allowing the present petition. In support of his submissions, learned counsel places reliance on following judgments:- (i) Ganga Ram Vs. State of Punjab, (2021 (44) GSTL 5) of this Court. (ii) Ratnambar Kaushik Vs. Union of India, (2022) 1 Centax 278 (SC) of Hon'ble Supreme Court. (iii) Vishal Chauhan Vs. Haryana State GST (Intelligence Unit), Rohtak, ((2024) 21 Centax 434) of Punjab and Haryana High Court. (iv) Ashutosh Garg Vs. Union of India, ((2024) 20 Centax 595 (SC)). (v) Sandeep Singhal Vs. DGGSTI, ((2024) 16 Centax 443) of Rajasthan High Court. (vi) Manish Kumar Vs. Directorate General, Goods and Services Tax Intelligence Zonal unit, Ludhiana, (2025TIOL-1233-HC-P&H-GST). (vii) Manoj Gupta Vs. Union of India and others, in CRM-M No. 20320 of 2025 of this Court, decided on 10.07.2025. 5. While opposing the petition, detailed reply has been filed by the respondent-department reiterating that petitioners are the mastermind of the entire network i.e. the activity of creating bogus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ollowing offences, namely:- (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax; (c) avails input tax credit using such invoice or bill referred to in clause (b); shall be punishable-- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five year and with fine. (ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred 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 amou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the Exchequer, as also that if allowed the relief of bail the possibility of accused tampering with the evidence could not be ruled out. In that context, Hon'ble Supreme Court held as under:- "43. When the undertrial prisoners are detained in jail custody to an indefinite period, Article 21 of the Constitution is violated. Every person, detained or arrested, is entitled to speedy trial, the question is: whether the same is possible in the present case. There are seventeen accused persons. Statement of the witnesses runs to several hundred pages and the documents on which reliance is placed by the prosecution, is voluminous. The trial may take considerable time and it looks to us that the appellants, who are in jail, have to remain in jail longer than the period of detention, had they been convicted. It is not in the interest of justice that accused should be in jail for an indefinite period. No doubt, the offence alleged against the appellants is a serious one in terms of alleged huge loss to the State exchequer, that, by itself, should not deter us from enlarging the appellants on bail when there is no serious contention of the respondent that the accused, if released....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... grant bail lies within the discretion of the Court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against 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. 41. This Court in Gurcharan Singh and Ors. v. State, AIR 1978 Supreme Court 179 observed that two paramount considerations, while considering petition for grant of bail in non-bailable offence, apart from the seriousness of the offence, are the likelihood of the accused fleeing from justice and his tampering with the prosecution witnesses. Both of them relate to ensure of the fair trial of the case. Though, this aspect is dealt by the High Court in its impugned order, in our view, the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....timidating or influencing. Therefore, keeping all these aspects in perspective, in the facts and circumstances of the present case, we find it proper to grant the prayer made by the petitioner. 7. Hence, it is directed that the petitioner be released on bail subject to the conditions to be imposed by the trial Court, which among others, shall also include the condition to direct the petitioner to deposit his passport. Further, such other conditions shall also be imposed by the trial Court to secure the presence of the petitioner to diligently participate in the trial. It is further directed that the petitioner be produced before the trial Court forthwith, to ensure compliance of this order." (emphasis added) It thus emerges that even in cases involving economic offences, the Court seized of the matter has to go through the gravity of the offence, the object of the Act, the attending circumstances, etc. Thus, economic offences cannot be categorized in one group and the Court should not proceed on the presumption that "Denial of Bail is the Rule and grant being the exception". 8. In the case in hand, the allegations against petitioners are that they are key-pe....