1. The applicant has preferred present Regular Bail Application under Section 439 of the Cr.P.C, in connection with File No. DGGI/AZU/ Gr.D/12(4)72/2018-19 for the alleged offence punishable under Sections 132(1)(b) and 132(1)(c) of the Central Goods and Service Tax, 2017 (for short ‘Act’).
2. According to case of the respondent No.2, the officer of Directorate General of GST Intelligence, Zonal Unit, Ahmedabad received specific intelligence that M/s. Bright Corporation, a Partnership Firm, having principal place of business at Ahmedabad, doing scrape business indulged in availing and passing on Input Tax Credit (for short ‘ITC’) to various buyers, without actual supply of corresponding goods. Search of Operations were carried out and during the investigation, it was found that 22 suppliers of M/s Bright Corporation were found non-existence or non-operational at their registered premises and they have supplied only invoices without actual supply of goods having ITC value of Rs.17.65 crores and entire transaction on paper. It further reveals that in chain of supply of ineligible ITC, received by M/s. Bright Corporation, which was further passed on M/s. Arihant Metal Company and in turn, it was passed on M/s. Rajat Metal Corporation. The investigation further reveals that present applicant Nirav Samson Gohil being an active partner of the firm, involved in management/rotation of cash flow in this fake invoice chain. In short, it is the case of the department that, M/s. Bright Corporation had availed fraudulent ITC on the basis of fake invoices received from their firm’s suppliers, causing loss to Government exchequer to the extent of Rs.17.65 crores.
3. In the aforesaid facts, the authority concerned has Reasons to Believe that the applicant has committed an offence as referred above and accordingly, he has been arrested on 26.11.2021 under Section 69 of the Act. He was produced before the Chief Metropolitan Magistrate, Ahmedabad and the court concerned authorized the authority for arrest of the applicant. After completion of the investigation, respondent authority served demand-cum-show cause notice dated 30.11.2021, as provided under Section 74 of the Act on M/s. Bright Corporation and 3 other persons including present applicant herein. The Dy. Director has also filed complaint before the Additional Chief Metropolitan Magistrate, Ahmedabad, which came to be registered on 21.12.2021 as Criminal Case No. 159448 of 2021.
4. The applicant herein moved an applications for regular bail before the Courts below and Courts below have rejected the bail application vide its order dated 23.12.2021 and 11.01.2022 respectively.
5. This Court has heard learned counsel Mr. Chetan Pandya, for and on behalf of applicant, Mr. Priyank Lodha, learned Standing Counsel for the respondent no. 2 and Mr. Manan Mehta, learned APP for the respondent State.
6. Mr. Chetan Pandya, learned counsel for and on behalf of the applicant has submitted that the allegations leveled against the applicant are false and frivolous and applicant has not at all availed and utilized the ITC as being alleged fraudulently. In this context, it was further submitted that the applicant is inactive partner of the firm and the entire business is being looking after by his father Samson Gohil and therefore, he being a partner of the firm, has been falsely arraigned in the alleged offence. He further submitted that the investigation is completed on 30.11.2021. The department issued demand notice under Section 74 of the Act and thereafter, complaint before the competent court is filed. In such circumstances, learned counsel submitted that the applicant is in custody since 26.11.2021, applicant does not have any criminal records and belongs to responsible family having deep roots in the society and hence, there are no chances of his absconding.
7. In support of aforesaid contentions, Mr. Pandya relief on the case of D.K. Shivakumar Vs. Directorate of Enforcement, 2020 (371) E.L.T 40 Delhi, to submit that while dealing with the bail application, the court has to consider the settled principles of triple tests i.e. flight risk, tempering evidence and influencing witnesses and same tests were applied by the Supreme Court in the matter of P. Chidambaram Vs. Directorate of Enforcement, (2020) 13 SCC 791, wherein, it was observed that the basic jurisprudence relating to bail remains the same in as much as grant of bail is the rule and refusal is the exceptional so as to ensure that the accused has opportunity of fair trial. Thus, therefore, considering the facts of the present case, he submitted that the maximum punishment is upto 5 years and case is triable by the magistrate court.
8. In view of the aforesaid contentions, learned counsel submitted that the offence is compoundable and entire case is based on documentary evidence and same has been seized and recovered by the authority and trial of the case would not conclude in a reasonable time. Thus, therefore, learned counsel submitted that discretion may kindly be exercised by enlarging the applicant on bail.
9. On the other hand, learned Standing Counsel Mr. Lodha appearing for respondent no. 2 opposed the contentions raised on behalf of the learned counsel for the applicant and reiterating the facts of the affidavit filed by the officer of the Department, contended that the amount of tax evasion is of Rs.17.65 crore. The applicant is involved in economic offence, which is serious in nature and the offence is cognizable and not bailable and therefore, the applicant being a mastermind of the whole scam, he is not entitled for bail.
10. In support of aforesaid contentions, the learned Standing Counsel relied on the case laws i.e. Nimmagadda Prasad Vs. CBI (2013) Law Suits SC 416, to submit that the economic offences constitute at class apart and need to be visited with a different approach in a matter of bail.
11. In the aforesaid contentions, learned Standing Counsel submitted that no case is made out for exercising power to release the applicant on bail and therefore, application may be rejected.
12. Having heard the learned counsel for the respective parties and upon perusal of the material placed on record, in the facts of present case, based on the investigation and after complying the statutory mandatory provision, the applicant herein is arrested on 26.11.2021. The tenure of the alleged offence is between 2017 to 2019. The respondent no. 2 already determined the tax amount and has served demand notice and thereafter, complaint before the court concerned is filed. The entire case is based on documentary evidence and same has been seized by the department. In such circumstances, merely an offence is termed as ‘economic offence’, it would not mean that in every case bail needs to be denied. Whether bail is granted or not, it always depends on peculiar facts of each case. The Apex Court in the case of P. Chidambaram (supra), reiterated the same view observed as follows :
“Thus from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of “grave offence” and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial.”
13. In the facts of the present case, more particularly fact that after filing the complaint, there is no progress in the trial proceedings and considering the cases of the court concerned, the trial of the case will take considerable time. The applicant is in custody since 26.11.2021 and he having no any past antecedent of like nature and there is no possibility of he being flee from justice and therefore, this Court does not find any good reason to detain the applicant in custody, that too, after completion of investigation and filing of the complaint.
14. In view of the above discussion, I find that no useful purpose would be served by keeping the applicant behind bar, thus, present application is allowed and he is ordered to be released on bail.
15. Hence, the applicant is ordered to be released on regular bail in connection with the File No. DGGI/AZU/Gr.D/12(4)72/2018-19, on executing a personal bond of Rs.10,000/- (Rupees Ten thousands only), with one surety of the like amount to the satisfaction of the learned Trial Court and subject to the conditions that he shall:
not take undue advantage of liberty or misuse liberty;
not act in a manner injuries to the interest of the prosecution;
surrender passport, if any, to the lower court within a week;
not leave India without prior permission of the Sessions Judge concerned;
furnish latest address of residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of the trial Court;
16. The authorities shall release the applicant if he is not required in connection with the any other offence. If breach of any above condition is committed, the Sessions Judge concerned shall take appropriate action or issue warrant against the applicant. The bail bond to be executed before the learned trial Court having jurisdiction to try the case. It will be open for the sessions judge concerned to delete, modify and/or relax any of the above conditions, in accordance with law. Nothing stated hereinabove, shall tantamount to the expression of any opinion on the merits of this case. Rule is made absolute to the aforesaid extent. Direct service permitted.