Govind Agarwal vs. State Of U.P. And Another
(Allahabad High Court, Uttar Pradesh)

Case Law
Petitioner / Applicant
Govind Agarwal
State Of U.P. And Another
Allahabad High Court
Uttar Pradesh
Feb 7, 2020
Order No.
Criminal Misc Anticipatory Bail Application U/S 438 CR.P.C. No. – 1337 of 2020
TR Citation
2020 (2) TR 1419
Related HSN Chapter/s
Related HSN Code



1. Heard Sri Anil Prakash, learned counsel for the applicant, and Sri B.A. Khan, learned A.G.A. for the State.

2. This anticipatory bail application (u/s 438 Cr.P.C.) has been moved seeking bail in Case Crime No.0864 of 2018 under sections 420, 467, 468, 471, 34 120B IPC & S.122 GST, Police Station Kosi Kalan, District Mathura , during the pendency of investigation.

3. As per FIR which has been lodged by the Assistant Commissioner, Sri Gulab Chand, the Proprietor of Govind Enterprises, namely Govind Agarwal (applicant) son of Sri Ajay Agrawal, resident of Rajpal Nagar Colony, N.H. Ranchi Bangar, Baad, Mathura had obtained GST Registration No.09CBIPA0305H1Z7 on 09.03.2018 from the Commercial Department, Divisional Office, Kosi Kalan Mathura through GST Portal for the purposes of business of packing material. At the time of making the said application, he had declared his I.D. e-mail address as [email protected] and mobile no. 8533952295. At the time of obtaining the registration by the applicant, he had shown his address as main business place as first floor, N.H. in front of Anaj Mandi Gate No.1, Kosi Kalan which was an accommodation on rent taken from Mahavir Singh, son of Ramesh Chand, resident of Haripura, Kosi Kalan at the rate of ₹ 1,000/- per month and in that regard a deed of rent was also executed and a receipt no. 200041391433 dated 17.02.2017 was also issued in that regard by Dakshiranchal Electricity Distribution Nigam Ltd. which was uploaded on the portal. From the said uploaded payment of the electricity bill, it was evident that at the time of registration, the applicant has shown his business being run from the said address, which place was owned by the first party namely, Mahavir Singh and the second party was the applicant, between them the rent agreement was executed, but the place meant for being signed by the witnesses were left vacant. On 27.09.2018 an enquiry was conducted by Sri Narendra Kumar, Deputy Commissioner, Commercial Tax, Kosi Kalan as well as Sri Gulab Chand, Assistant Commissioner, Commercial Tax, Kosi Kalan, Sushree Isha Gautam, Assistant Commissioner, Commercial Tax, Mathura and this fact came to light that on the given address no board of the firm was affixed and the said place had a room on the first floor measuring 18 ft. x 20 ft. only. The owner of the house Mahavir Singh disclosed that on 1.3.2018 he had given the said accommodation to the applicant on rent at the rate of ₹ 1,000/- per month and its registration was also got done by him by the name of Govind Enterprise and that he was an advocate also in the firm. In the said room, no documents/books related to the firm were found except one computer and a laptop and printer were kept which Sri Mahavir Singh disclosed that they did not have any data relating to Govind Enterprise and also stated that there were several forms related to his advocacy. At the time of raid, two persons were found working on the computer who disclosed that they were working in respect of the accountancy of the said advocate and that there was no place/go-down to keep stock. The entire work of Govind Enterprise used to be done from its Kanpur located branch/godown and that all the related books of account were kept at the branch located at Kanpur. Therefore, simultaneously, Chandrashekhar, Deputy Commissioner Range-C, Commercial Tax also conducted raid/inspection of Kanpur Branch of the said firm on 27.9.2018 and at that time Mukesh Sharma son of Ram Kumar Sharma was found present, who was labour contractor of the Agarwal Industries. At the time of inspection, the owner of the said flat Sri Indrapal was also contacted, who disclosed that the said shop was taken by him on rent through one Dharmendra Gurjar son of Kali Charan, resident of Malampur Bhind, M.P. Dharmendra Gurjar has disclosed that he had taken the accommodation on rent at the instance of the Accountant Manish at the rate of ₹ 700/- per month and that the rent was being realized since 15.09.2018. Further, it was stated that Dharmendra Gurjar, who was Munim in the firm who used to get ₹ 10,000/- per month salary. Further, he disclosed that he did not know the owner of the firm namely, Govind Agarwal (applicant) and that he was sent by Ram Niwas Gurjar of Bhind to work there, who runs Pitambar Transport. The said shop was measuring 10 ft. x 12 ft. and had old locks on it which had not been opened since long, right from the date the said shop was taken on rent and that since then only one truck had been unloaded there which contained 108 Gattas Panni Plastic which was received from Noida, Sector 57, which weighed about 30 kgs. The shop was found closed as locks were put on it.

When account books were demanded, it was told that bill parchas were with the Accountant who had gone to Mathura. No account books could be found and it was said that last time the consignment had been received a week ago. Two persons were said to be working there. At the time of inspection, the owner of the shop met the said Commissioner who was told that he had not entered into written agreement nor had he given his shop to any person by the name of Govind Agarwal running Govind Enterprises. He had given the said shop on rent to one Dharmendra Gurjar only for a month but what does he do, he had no knowledge and the shop was locked, keys of which is with the Accountant. At the time of registration, the applicant had declared his saving bank account no.04672121008171 in Oriental Bank of Commercial village and post Auragabad, District Mathura.

4. Further, on the said date the applicant had taken inward supply of paper laminated foil, printed plastic laminated pouch, printed paper aluminum etc. worth ₹ 35,02,28,642.00 while by way of outward supply only two e-way bills were generated in favour of the seller of ₹ 1,64,334.00 of Motaz Enterprises Pvt. Ltd. Bhind, M.P. GST no. 23AACCM8173H1ZG and ₹ 14,94,774.00 of Motaz Enterprises Pvt. Ltd. GST 9AACCM8173H1Z6. Further, it is mentioned in the FIR that despite such huge quantity having been purchased through outward supply, no e-way bill was down loaded. In enquiry, it was found that Govind Enterprises had supplied material worth ₹ 35,02,28,642.00 through 295 e-way bill as per rules which were supplied to the companies/traders. The both of the applicant’s firm were generated from the address given of Kanpur in the name of the supplier company/traders i.e. Motaz Enterprises Pvt. Ltd. (U.P.) and several other suppliers who have been named in the FIR along with GST Registration number. During enquiry, it transpired that the nature of account of the applicant’s firm was saving bank account which was opened in Oriental Bank of Commerce, village and post Aurangabad, Mathura which appeared account no. 04672121008171. When the said account was enquired then it was found that the same was being run from 27.8.2009 and till 16.11.2018 only ₹ 6448.00 were found available in that account and that between 27.8.2009 to 26.11.20018, the total amount deposited was shown as ₹ 3,73,389.00 and the whole outlet is shown worth ₹ 4,00,017.00. After enquiry of this account, it has been concluded that the economic condition of the applicant’s firm was extremely limited for last ten years and that such huge business could not have been performed by him and that no big money transaction reflected from the said account and therefore it was sufficient to hold that the applicant along with some unknown persons had conspired to effect an offence of theft. After the enquiriy conducted, it emerges that in another account existing in the name of the accused-applicant, through statement of account, it came into light that the Bank by the name of DD Nagar, Gwalior, M.P. was being run and in the said bank, the applicant after giving his address as Govind Enterprise, New Mahavir Colony, Birla Nagar Murar, Gwalior got opened account in HDFC Bank, therefore, it is clear that account which was got opened in HDFC after giving address of a different bank branch would reflect that the address of the bank branch was mentioned as HDFC, DD Nagar Abhilasha Bhawan house No.1, R.J. Puram Mahrautra Firm, Bhind Road, Gwalior, M.P.-474020. When the said bank account was inspected, it was found that the applicant had deposited a sum of ₹ 9,39,07,715/- between 11.07.2018 to 16.11.20018 and the details of the same have been mentioned in the FIR. The said account reveals that the applicant was running his business by the name of Govind Enterprises from an address 47, Rajpal Nagar Colony, N.H-2, Rachi Bangar, Baad, Mathura then why he felt it necessary to open another account in State of M.P. Further, whatever amount he received after sale to other traders, the entire transaction happened in the State of U.P. and it is not clear as to under what circumstances, he deposited such huge amount in other State while there was facility available of Internet Banking, RTGS as well as NEFT. The deposit of huge amount by a third trader and others in the State of M.P. shows that in collusion with some unknown person, a conspiracy was hatched for evasion of tax.

After enquiry into the units of the applicant’s firm and from the bank statement and other details mentioned on GSTN Porter, it appears that the applicant was not running his business in accordance with rules at his given premises on 27.9.22018 as neither the the board of the firm was installed there nor any account books were found and whatever sale and purchase had been shown through the papers, the same appeared to have been done in collusion with some unknown firm and person in order to avoid the tax payment. Further, it is mentioned that the business is being shown to have been run from two places, and if those places be taken into consideration particularly their geographical situation as well as their size, it was not possible to do such huge business.

During enquiry, at Fazalganj Branch, the owner of the property clearly admitted that neither he knew the applicant nor had he given his premises for running the business by the name of Govind Enterprises. Therefore, when the said declared branch never existed, question does not arise of keeping the account books there and it was found that Govind Enterprises did not exist at its main place of business rather the purchased items appeared to have been sold somewhere else on the basis of bogus document. Further, it is mentioned that the bank account of the applicant’s firm is saving bank account which got opened in Oriental Bank of Commerce, village post Aurangabad, Mathura, account number of which is 04672121008171, which proves that the economic capability of the applicant was extremely limited because the total balance amount in the said account stood at ₹ 6848/- only and that no transaction was done from the said account. Therefore, there was sufficient basis to come to the conclusion that the applicant was either working in collusion with the some unknown firm/person or was working as an agent and in collusion with some person as thus has given effect to tax evasion. Further a huge amount having been deposited at HDFC Bank, Gwalior, M.P. would indicate that after collusion with some unknown firm/person, a conspiracy was hatched to commit tax evasion. According to the registration, the applicant’s firm appears to have been registered for purchase of plastic laminated foil, printed plastic laminated pouch, printed paper Aluminium etc. and from e-way bill down loaded by the applicant, the article appears to have been purchased from Motaz Enterprises Pvt. Ltd, Noida and when survey was done of the said company, it came to light that production was being done of high quality printing packing material by Motaz Enterprises Pvt. Ltd. It is worth noting that the applicant’s firm had purchased through eway bills from Motaz Enterprises Pvt. Ltd. Bhind, M.P., GST No . 09ZAACCM8173H1Z6 and the said printed packing material was to the tune of ₹ 17,55,80,481.00 The said packing material was being used by the production companies, therefore, the same was not worth being sold in open market and it made absolutely clear that the firm of the applicant, in collusion with others, was involved in tax evasion activities and hence an offence under sections 420, 467, 468, 471, 34 and 120B IPC and SGST/CGST Act have been committed by him.

5. Submission made by the learned counsel for the applicant is that in spite of allegedly tax evasion, till date, no case has been made out under the U.P. Goods and Services Tax Act and Rules 2017 or under Central Goods and Services Tax 2017 or IGST Act, 2017. Further without deciding as to whether the applicant had evaded tax or not, lodging of FIR was improper that the applicant had contravened the provisions of sections 420, 467, 468, 471, 34 and 120-B IPC. The FIR has been lodged on 30.11.2018 while the contravention of the provision of the said section is said to have been made on 27.9.2018 which is highly belated without any proper explanation. The applicant is innocent and has been falsely implicated. He has apprehension of his arrest. If released on bail he would not misuse the liberty and would co-operate with the investigation.

6. By filing supplementary affidavit, learned counsel for the applicant has drawn the attention to the rent deed executed between Mahavir Singh and the applicant which is annexed at pages 6-7 of the S.A. relating to one office in front of Anaj Mandi Gate No.1, NH-2, 1st Floor, Kosi Kalan area 12 ft x 16 ft given on rent to the applicant at the rate of ₹ 1,000/- per month for a period of 11 months. He has also drawn attention towards the pages 8-9 of the said supplementary affidavit which is an agreement to take property on rent executed between Indrapal Yadav and the applicant’s firm through applicant by which house no. 101, Fazalganj, Kanpur Nagar is shown to have been given on rent at the rate of ₹ 7,000/- per month to the applicant. He has also drawn attention to page 12 to 36 which are being stated to be the papers pertaining to GST amount. He has drawn attention towards pages 46 onward which are stated to be the GST return filed by the applicant’s firm and on the basis of the documentary evidence, he has stated that no amount of tax evasion has been assessed by the prosecution side and yet FIR has been lodged which is illegal and in such situation he needs to be granted anticipatory bail.

7. The Additional Session Court 11 has erroneously dismissed the anticipatory bail application of the applicant vide order dated 18.10.2019, which needs to be set aside. He has placed reliance upon the judgment rendered in Radheshyam Kejriwal vs. State of West Bengal, 2011 (266) E.L.T. 294 (S.C.) in which reliance has been placed on para nos. 43 and 46 which are quoted here-inbelow;

“43.We find substance in the submission of Mr. Sharan.There may appear to be some conflict between the views in the case of Standard Charted Bank (supra) and L.R. Melwani (supra) holding that adjudication proceeding and criminal proceeding are two independent proceedings and both can go on simultaneously and finding in the adjudication proceeding is not binding on the criminal proceeding and the judgments of this Court in the case of Uttam Chand (supra), G.L.Didwania (supra) and K.C. Builders (supra) wherein this Court had taken a view that when there is categorical finding in the adjudication proceeding exonerating the person which is binding and conclusive, the prosecution cannot be allowed to stand. Judgments of this Court are not to be read as statute and when viewed from that angle there does not seem any conflict between the two sets of decisions. It will not make any difference on principle that latter judgments pertain to cases under theIncome Tax Act. The ratio which can be culled out from these decisions can broadly be stated as follows :-

(i) Adjudication proceeding and criminal prosecution can be launched simultaneously;

(ii)Decision in adjudication proceeding is not necessary before initiating criminal prosecution;

(iii)Adjudication proceeding and criminal proceeding are independent in nature to each other;

(iv)The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution;

(v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure;

(vi)The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and

(vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases.

In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceeding as well as proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceeding is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be in abuse of the process of the court.

46. A learned Single Judge of the Bombay High Court had the occasion to consider this question in a case under the Foreign Exchange Regulation Act in Criminal Application No. 1070 of 1999 (Hemendra M. Kothari vs. Shri W.S. Vaigankar, Assistant Director, Enforcement Directorate (FERA), Govt. of India and State of Maharashtra), decided on 25.04.2007 and on a review of large number of decisions of this Court and other courts it came to the following conclusion :-

“21. It may be noted that in the present case the applicant was exonerated by the Dy. Director of Enforcement, who was adjudicating authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the adjudicating authority in detail. The adjudicating authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was completely exonerated. When in the departmental proceedings before the adjudicating authority, the department could not establish the charges, it is difficult to imagine how the department could prove the same charges before the criminal Court when the standard of proof may be much higher and stringent than the standard of proof required in departmental proceedings.”

The Delhi High Court also considered this question arising out of a case under Foreign Exchange Regulation Act, in detail in the case of Sunil Gulati & Anr. V. R.K. Vohra 145 (2007) DLT 612, and held as follows :-

“In case of converse situation namely where the accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determine whether these criminal proceedings should still continue. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex facie there is no such violation.

The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned person in the departmental proceedings is on merits holding that there is no contravention of the provisions of any Act.”

8. He has also placed reliance upon the judgment rendered in Chitira Builders P. Ltd. Vs. Addl. Commr. Of C, C.E. & S.T. Coimbatore, 2013 (31) S.T.R. 515 (Mad.) in which it has been held;

“that collection of ₹ 2.00 crores by the Department from, petitioner-company during search conducted, cannot be held to be valid even though it had been stated on behalf of the Department that a sum of ₹ 2.00 crores had been collected from the petitioner-company,, voluntarily, in respect of its Service Tax liability, it has not been shown by the Department that the petitioner was liable to pay Service Tax to the respondent Department relating to the works being carried on by it during the course of its business. No tax could be collected from the assessee, without an appropriate assessment order being passed by the authority concerned and by following the procedures established by law and accordingly the respondent was directed to return the sum of ₹ 2.00 crores, collected from the petitioner.”

9. He has further placed reliance upon the judgment rendered in Metal Forgings vs. Union of India, 2002 (146) E.L.T. 241 (S.C).

Attention has been drawn to para 10 of this judgment, which is quoted here-in-below;

“10. It is an admitted fact that a show cause notice as required in law has not been issued by the revenue. The first contention of the revenue in this regard is that since the necessary information required to be given in the show cause notice was made available to the appellants in the form of various letters and orders, issuance of such demand notice in a specified manner is not required in law. We do think that we cannot accede to this argument of the learned counsel for the revenue. Herein we may also notice that the learned Technical Member of the tribunal has rightly come to the conclusion that the various documents and orders which were sought to be treated as show cause notices by the appellate authority are inadequate to be treated as show cause notices contemplated under Rule 10 of the Rules or Section 11A of the Act. Even the Judicial Member in his order has taken almost a similar view by holding that letters either in the form of suggestion or advice or deemed notice issued prior to the finalisation of the classification cannot be taken note of as show cause notices for the recovery of demand, and we are in agreement with the said findings of the two Members of the tribunal. This is because of the fact that issuance of a show cause notice in a particular format is a mandatory requirement of law. The law requires the said notice to be issued under a specific provision of law and not as a correspondence or part of an order. The said notice must also indicate the amount demanded and call upon the assessee to show cause if he has any objection for such demand. The said notice also will have to be served on the assessee within the said period which is either 6 months or 5 years as the facts demand. Therefore, it will be futile to contend that each and every communication or order could be construed as a show cause notice. For this reason the above argument of the revenue must fail.”

10. Further, it is held in this judgment that a show cause notice is a mandatory requirement for raising demand. Communications, orders, suggestions or advices from the Department would not be deemed to be a show cause notice because a specific show cause notice indicating the amount demanded and calling upon the assessee to show cause if he has any objection to such demand, was necessary.

11. He has further placed reliance upon the judgment rendered in Akhil Krishan Maggu vs. Dy. Dir. D.G. of GST Intelligence, 2020 (32) G.S.T.L. 516 (P&H), in which it has been held that power to arrest has to be resorted in exceptional cases with full circumspection and summons are served to record statement are complied with then mandate of sections 41 and 41A of Cr.P.C. should be taken care of.

41. When police may arrest without warrant -(1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person-

(a) who commits, in the presence of a police officer, a cognizable offence;

(b) against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence punishable with imprisonment for a term which may be less than seven years or which may extend to seven years 28 of 36 CWP No.24195 of 2019(O&M) #29# whether with or without fine, if the following conditions are satisfied, namely:

(i) the police officer has reason to believe on the basis of such complaint, information, or suspicion that such person has committed the said offence;

(ii) the police office is satisfied that such arrest is necessary13

(a) to prevent such person from committing any further offence; or

(b)for proper investigation of the offence or;

(c) to prevent such person from causing the evidence of the offence to disappear or tampering with such evidence in any manner; or

(d) to prevent such person from making any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the police officer; or

(e) as unless such person is arrested, his presence in the Court whenever required cannot be ensured;

And the police officer shall record while making such arrest, his reasons in writing:

Provided that a police officer shall, in all cases where the arrest of a person is not required under the provisions of this sub-section, record the reasons in writing for not making the arrest;

41-A Notice of appearance before police officer- (1) The police officer shall, in all cases where the arrest of a person is not required under the provisions of sub-section (1) of section 41, issue a notice directing the person against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence, to appear before him or at such other place as may be specified in the notice.

(2) Where such a notice is issued to any person, it shall be the duty of that person to comply with the terms of the notice.

(3) Where such person complies and continues to comply with the notice, he shall not be arrested in respect of the offence referred to in the notice unless, for reasons to be recorded, the police officers is of the opinion that he ought to be arrested.

(4) Where such person, at any time, fails to comply with the terms of the notice or is unwilling to identify himself, the police officer may, subject to such orders as may have been passed by a competent Court in this behalf, arrest him for the offence mentioned in the notice.

Arrest – Power to arrest – When to be exercised- Section 69 and 132 of Central Goods and Services Tax Act, 2017.-power of arrest should not be exercised at the whims and caprices of any officer or for the sake of recovery or terrorizing any businessman or create an atmosphere of fear, whereas it should be exercised in exceptional circumstances during investigation , which illustratively maybe : (I) a person is involved in evasion of huge amount of tax and is having no permanent place of business, (ii) a person is not appearing in spite of repeated summons and is involved in huge amount of evasion of tax, (iii) a person is a habitual offender and he has been prosecuted or convicted on earlier occasion, (iv) a person is likely to flee from country , (v) a person is originator of fake invoice, i.e.,invoices without payment of tax, and (vi) when direct documentary or otherwise concrete evidence is available on file/record of active involvement of a person in tax evasion [ 2016(44) S.T.R 481 (Del), 2019 (25) G.S.T.L321(Mad.), (2011) 1 SCC 694 relied on].[paras 9,10]

12. By drawing attention to the above rulings, the main point which has been emphasized by the learned counsel for the applicant is that because no proper notice has been served upon the applicant demanding outstanding amount of GST, therefore, there was no necessity of the accused being arrested. A legal notice was required to be served upon the applicant to pay the outstanding amount of GST but instead of that FIR has been lodged on the basis of which the applicant is apprehending imminent arrest which has necessitated him to move this anticipatory bail application seeking protection from this Court. It was further emphasized during argument by the learned counsel for the applicant that U.P. Goods and Services Tax 2017 (In short U.P. Act) is a complete code in itself, therefore, there was no need for imposing offence under the above-mentioned sections of IPC. He has also drawn attention towards sections 122 as well as 132 of the U.P. Act which provides penalties for an offence having been found committed under the said Act, would be punishable and has again emphasized that since no service of notice has been effected of any fixed amount, which is being stated to have been violated by him, therefore, this kind of FIR is nothing but an abuse of the process of law.

13. On the other hand, learned A.G.A. has vehemently opposed for grant of bail and has drawn attention to the statement of Narendra Kumar, Deputy Commissioner, Commercial Tax, Sector Kosi, which was placed before the Court as case diary was received and the same was found annexed and it has been argued that in the said statement, he has fully supported the prosecution version as narrated in the FIR and further attention is drawn to the order of a Division bench of this Court dated 30.5.2019 passed in Crl. Misc. Writ Petition No. 7303 of 2019 Govind Enterprises vs. State of U.P. and others in which the applicant had sought quashing of FIR filed against him under the above-mentioned sections and the Division Bench had considered all aspects of the matter at length which may be found from perusal of the said judgment and has given finding that according to FIR necessary ingredients of offence of cheating, by submitting false information and documents have been clearly spelled out because a bogus firm was got registered by showing false bogus addresses of business, and, by taking advantage of registration, inward e-way bills were generated to make purchase of goods worth ₹ 35.00 odd crores and, thereafter without generating outward supply bills, huge amount of money was deposited in cash in undisclosed bank account, suggesting that goods were sold without proper documentation, with a view to evade taxes. In such view of the matter, the Division Bench of this Court has not found the case fit for quashing the FIR and dismissed the same after observing that power of staying arrest is not to be exercised mainly in the matters relating to economic fraud and therefore finding this to be an economic fraud, it had declined to stay the arrest.

14. I have gone through the evidence of the present case and also judgment of the Division Bench of this Court dated 30.5.2019 and also have gone through case laws which have been provided by the learned counsel for the applicant above, I find that this is not to be a fit case in which indulgence of granting anticipatory bail should be exercised because it has come on record that the applicant’s firm was found indulging in running business from bogus address and a huge transaction is shown to have been done without there is any such big transaction reflected from the account of the firm. The argument of the learned counsel for the applicant that notice is required to be issued to the accused before lodging FIR also does not sound to be a reasonable view because there are offence alleged to have been committed under sections 420, 467, 468, 471, 34 and 120B IPC also regarding which no such notice is required to be sent. It is found to be a case of economic fraud in which normal course adopted by the Courts should be not to grant stay against arrest because investigation might require custodial interrogation as well. This court is not to be guided only by the fact that apart from IPC, offence under U.P. Act is also said to have been committed which requires notice to be issued to the accused and in totality of the matter this Court finds that there is no genuine ground to grant relief of anticipatory bail to the accused-applicant in this matter.

15. Looking to the aforesaid fact, taking into consideration the gravity of accusation, and there being possibility of his fleeing from justice, without expressing any opinion on the merits of the case, this Court does not find good ground for enlarging the applicant, Govind Agarwal on anticipatory bail in this case.

The anticipatory bail application of the applicant Govind Agarwal is, accordingly, rejected.

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