The Allahabad High Court has allowed bail application in offences under Sections 132 (1) (B) (I), Central Goods & Services Tax Act, 2017 after considering the conditions laid down SC precedents.
The single-judge bench of Justice Subhash Vidyarthi was dealing with application filed by Sri Dhananjay Awasthi against whom CGST Officials were investigating a case of huge evasion of GST on the basis of an intelligence input that the applicant is indulging in issuing bogus invoices without supply of goods, in the name of fake firms created by him.
Brief Facts of the Case
After searches were conducted at his place, analysis of the mobile data revealed his communication with other persons directing them to issue invoices, e-way bills etc. and hundreds of invoices issued in the name of various firms, were found in the mobile phone. In a laptop computer recovered from another premises of the applicant, tax calculations of various firms were there, the mention whereof was found in the mobile phone data.
A person present at the location stated that he was an employee of the applicant and he produced the electricity bill of the building in the name of the applicant. Two laptop computers, 10 mobile phones and some rough papers having details of many fake firms viz, the name of the proprietor and GSTIN addresses etc. were also recovered. It was said that the mobile phones were used to receive one time password (OTP) at the time of GST registration and the aforesaid details matched with the data available in the mobile phone of the applicant, indicating the applicant's control over the fake firms. A currency note counting machine, a printer and a router were also recovered from the premises of the applicant.
As per the prosecution case, it has been revealed during investigation that the total invoice value of the fake supplies made by the aforesaid 126 bogus firms is Rs. 691.35 Crores and the total GST evasion involved in it is Rs. 100.30 Crores.
As per the prosecution case, the applicant is the main master- mind behind issuance of bogus invoices without supply of goods, only to pass on inadmissible / fraudulent input tax credit, because of which the Government exchequer has suffered a huge loss of Revenue to the tune of more than Rs. 100 Crores. On 22.11.2021, the Investigating Officer, Central Goods & Services Tax & Central Excise, Commissionerate Agra has filed a complaint in the Court of Special Chief Judicial Magistrate, Agra against the applicant under Sections 132 (1) (b) of the CGST Act, 2017.
In the affidavit filed in support of the bail application, it has been claim that the applicant is involved in business of property dealing for a long time and that he has been falsely implicated in the present case by his tenant.
In the affidavit filed in support of the bail application, it has been stated that the applicant was engaged in the business of property dealing through his firm.
A counter affidavit has been filed on behalf of the Union of India, wherein it has inter-alia been stated that the applicant was not engaged in the business of property dealing and the certificate of registration of Shri Shanti Associates, proprietor Nitin Verma, issued under Section 69 of the Finance Act, 1994, a copy where of has been filed alongwith the affidavit filed in support of the bail application on behalf of the applicant himself, mentions the services “Franchise Services”.
Submissions
The learned counsel for the applicant has submitted that the alleged offence under Section 132 (I) (b) CGGST Act , 2017 is triable by a Magistrate and the maximum prescribed punishment is 5 years’ imprisonment and, therefore, the applicant ought not to have been arrested for the aforesaid offence and that he is entitled to be released on bail on this ground also.
The learned Counsel for the applicant has further submitted that earlier, this Court had granted anticipatory bail to the applicant for a period of six weeks or till conclusion of the enquiry under Section 70 (1) of the CGST Act, whichever was earlier.
The Learned counsel for the applicant also submitted that the co-accused Chandra Prakash Kriplani, from whose possession the alleged incriminating material was recovered, has already been released on bail and, therefore, the applicant is also entitled to be released on bail on the ground of parity.
He submitted that neither any bogus invoice nor any bogus e-way bill has been recovered from the applicant’s possession.
His submission was that when the payment has been made through banking channel, no black money was involved in the transactions. He further submitted that no alleged fake invoice claiming input tax credit has been placed on record and no such invoice has been verified so as to prove that it is fake. Based on the aforesaid submissions, the learned Counsel for the applicant claims that the applicant has been falsely implicated in the present case and he is entitled to be released on bail.
Opposing the prayer for grant of bail, the learned counsel appearing for the Union of India has submitted that the applicant is an economic offender and he has caused a loss of Government Revenue to the tune of more than Rs. 100 Crores by creating fake firms and by issuing bogus invoices and by wrongly claiming input tax credit.
He placed reliance on wherein the Supreme Court of India has held that “socio-economic offences constitute a class apart and need to be visited with a different approach in the
matter of bail. Usually socio-economic offence has deep rooted
conspiracies affecting the moral fiber of the society and causing
irreparable harm, needs to be considered seriously.”
Reliance was also placed on Dataram Singh Vs. State of Uttar Pradesh and another.
High Court's Observation
The Court at the outset discussed in detail the judgement in Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation, 2013 Latest Caselaw 378 SC wherein the Supreme Court was dealing with an application for grant of bail in a case under Section 120-B read with Sections 420, 409 and 477-A of the Penal Code, 1860 and Section 13 (2) read with Sections 13 (1) (c) and (d) of the Prevention of Corruption Act, 1988 against Y. S. Jagan Mohan Reddy, Member of Parliament and 73 others.
The Court was dealing with allegations of offences which were punishable with upto life imprisonment, but in the present case, the maximum punishment that can be imposed upon the applicant is five years’ imprisonment. Moreover, the offence is compoundable as per the provision contained in Section 138 of the CGST Act, sub-Section (1) whereof provides that “Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case be, of such compounding amount in such manner as may be prescribed”.
It mentioned recent ruling in the case of Satender Kumar Antil Vs. Central Bureau of Investigation & Anr., 2022 Latest Caselaw 527 SC, the Hon’ble Supreme Court has summarized and reiterated the law regarding grant of bail in economic offences, as laid down in its earlier decisions.
In background of the above, the Court took into consideration while allowing the bail:
(1) the applicant has been implicated on the basis of the statement of a co-accused Chandra Prakash Kriplani, who has already been granted bail by this Court;
(2) earlier, the applicant himself had been granted anticipatory bail by this Court;
(3) the applicant has no criminal history;
(4) the department had initiated proceedings on 31.12.2019 by issuing a summons under Section 70 of CGST Act and after completion of the investigation, on 22.11.2021 the department has filed a complaint in the Court of Special Chief Judicial Magistrate, Agra and, therefore, it cannot be said that now the applicant is in a position to influence the investigation of the case;
(5) the applicant is languishing in jail since 26-09-2021; (6) the maximum punishment that can be imposed upon the applicant is five years’ imprisonment and (7) the offence is
compoundable as per the provision contained in Section 138 of the CGST Act,
Social media is bold.
Social media is young.
Social media raises questions.
Social media is not satisfied with an answer.
Social media looks at the big picture.
Social media is interested in every detail.
social media is curious.
Social media is free.
Social media is irreplaceable.
But never irrelevant.
Social media is you.
(With input from news agency language)
If you like this story, share it with a friend!
We are a non-profit organization. Help us financially to keep our journalism free from government and corporate pressure
0 Comments