TaxTMI 
TaxTMI 
2025 (12) TMI 1134
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.... the respondent, were conducted, almost simultaneously. The first search was from 5.45 P.M. to 11.45 P.M. at the residential premises of the petitioner and the second one from 5.43 P.M. on 26.05.2025 till 01.50 A.M. on 28.05.2025 at the premises of the company of the petitioner 'M/s PMI Smelting Private Limited', GST No. 03AANCP1807A1ZZ. As per complainant, during the former search, one mobile phone and certain documents kept in Folders No.1 and 2, respectively, were seized, while in the second search only the personal mobile phone of the petitioner was seized. 3. The pith and substance of the allegations, as contained in the complaint, is that an intelligence was gathered to the effect that 'M/s PMI Smelting Private Limited' having registered office at 536/210, Industrial Area-C, Dhandari Kalan, Ludhiana, having GSTIN 03AANCP1807A1ZZ, was engaged in availing Input Tax Credit, hereinafter being referred to as "ITC", and has thereby caused loss to the State Exchequer to the tune of Rs.30.21 Crores (approx.) on the basis of invoices taken from 'M/s P.C. Techno Solutions', without actual transaction of goods. Said 'M/s P.C. Techno Solutions' was further taking ITC on the basis of i....
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....material showing involvement of the petitioner in any crime was collected; iv) that the panchnama with regard to seizure of alleged evidence, such as cheque book etc. at the business premises of the petitioner shows that the search proceedings were conducted in the presence of so called Manager, namely Inderpal Singh. According to petitioner, Inderpal Singh has never been an employee of the petitioner and thus, the very basis of the prosecution of the petitioner, i.e. search proceedings itself, stands vitiated; v) that the premises being plot No. 501, Industrial Area-B, Gill Road, opposite Meshi Dhabha, Ludhiana, Punjab, does not belong to the petitioner and in fact an entirely separate entity is operating its business activities from the aforesaid address, having no connection or nexus, whatsoever, with the petitioner; vi) that before conducting raid, neither any show cause notice was served upon the petitioner nor he was given an opportunity of being heard or explain his position and straightway the prosecution has been initiated; vii) that the petitioner was detained by the officials of the respondent in the evening on 26.05.2025 without showi....
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....icial precedents, but the instant case is an example of blatant violation and breach of all the above mentioned norms and the statutory provisions. According to learned counsel for the petitioner, one of the most strange fact to be taken into consideration is that the entire prosecution of the petitioner is founded on the alleged search, conducted in the alleged business premises of the petitioner, and that the above mentioned search itself is a doubtful proceeding and also a proceeding conducted in violation of law. 9. With regard to above, the learned counsel for the petitioner has contended that firstly, the premises where the search was conducted did not belong to the petitioner, secondly the person who was allegedly present on the spot as Manager of the petitioner's company, was never employed by the petitioner and therefore, the proceedings with regard to collection of evidence on the spot in itself stands vitiated. 10. The learned counsel for the petitioner has also contended that in the present case, the officials of the respondent have violated the fundamental rights guaranteed to the petitioner, being citizen of India, i.e. producing him before the Court within 24 h....
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....it of bail. According to learned counsel for the respondent, there is ample positive evidence showing the involvement of the petitioner in the commission crime under Section 132(1) (b)&(c) read with Sections 132(1(i) and 135(5) of the CGST Act, and that the falsity of the stand of the petitioner can be seen from the fact that the petitioner has gone to the extent that he has denied this fact that the premises, where the raid was conducted, belongs to him and also that the person who was present and looking after the above mentioned premises was an employee of the petitioner. 15. The learned counsel for the respondent has further contended that the allegations against the petitioner are that he caused loss to the tune of Rs.32.01 crores to the State exchequer by creating goods-less invoices and then claiming 'Input Tax Credit'. According to learned counsel for the respondent, the offence committed by the petitioner has far reaching impact on the financial health of the country, and that the Hon'ble Supreme Court of India has repeatedly observed that the economic offences should be dealt with iron hands. While claiming that the petitioner is not even entitled for bail on the groun....
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.... 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." 19. In addition to above, it is also relevant to mention here that the Hon'ble Supreme Court of India in the case of Radhika Agarwal (supra) has propounded that "the arrest must proceed on the belief supported by reasons relying on material that the conditions specified in Section 132(5) are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing to the satisfaction of the Commissioner that the requirements of sub-section (5) to Section 132 of the GST Act are met'. 20. It has also been observed by the Hon'ble Supreme Court of India in the above mentioned case that "the figur....
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....d. 25. In the case of Sanjay Chandra (supra), the Hon'ble Supreme Court of India has observed that it is not in the interest of justice that accused should be in jail for any indefinite period. According to Hon'ble Apex Court, even if the offence is serious in terms of huge loss to the State exchequer, that, by itself, should not deter the Court from enlarging the appellant on bail, when there is no serious contention of the respondent that the accused, if released on bail, would interfere with the trial or tamper with the evidence. 26. Further still, recently, in Ashutosh Garg vs. Union of India, Special Leave to Appeal (Crl.) No(s).8740/2024, decided on 26.07.2024, the Hon'ble Supreme Court has granted bail in a matter where the accused defrauded the State exchequer of Rs.1032 crores as 'Input Tax Credit' by creating 294 fake firms, citing long custody of 09 months as well as the fact that maximum punishment in the offence under Section 132 CGST Act is 05 years. 27. In the case of Ratnambar Kaushik vs. Union of India (2023) 2 SCC 671, the Hon'ble Supreme Court of India deliberated upon the documentary and electronic nature of evidence as well as the prolonged trial in th....
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....) the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. b) it has to be kept in mind that for purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. c) it is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt." 29. It is also relevant to mention here that keeping in view the nature of offence committed by the accused, the benefit of bail was denied by the Hon'ble Supreme Court of India in the case of Nimmagadda Prasad (supra) and Amit Kumar alia....
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....n which states that no person who is arrested shall be detained in custody without being informed as soon as may be of the grounds of such arrest, nor shall such arrest be denied the right to consult and to be defended by a legal practitioner of his choice." It has also been observed in the above mentioned case that "the arrest must proceed on the belief supported by reasons relying on material that the conditions specified in sub-section (5) of Section 132 are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing to the satisfaction of the Commissioner that the requirements of sub-section (5) to Section 132 of the GST Act are met." 35. With regard to definition of term 'arrest', the Hon'ble Supreme Court of India in the case of Padam Narain Aggarwal (supra) has observed that "the word "arrest" is derived from the French word "arrater" meaning "to stop or stay". It signifies a restraint of a person - "Arrest" is....
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....jurisprudence or to our society. There is no doubt that the grant or denial of bail is entirely the discretion of the judge considering a case but even so, the exercise of judicial discretion has been circumscribed by a large number of decisions rendered by this Court and by every High Court in the country. Yet, occasionally there is a necessity to introspect whether denying bail to an accused person is the right thing to do on the facts and in the circumstances of a case." 38. The principles laid down by the Hon'ble the Supreme Court of India in the case of Satender Kumar Antil v. Central Bureau of Investigation and Another (2022) 10 SCC 51, are also relevant in this case. In the above mentioned case, it has been observed that "the rate of conviction in criminal cases in India is abysmally low. It appears to us that this factor weighs on the mind of the Court while deciding the bail applications in a negative sense. Courts tend to think that the possibility of a conviction being nearer to rarity, bail applications will have to be decided strictly, contrary to legal principles. We cannot mix up consideration of a bail application, which is not punitive in nature with that of a p....