1. Heard Sri Pawan Giri, learned counsel for the applicant and Sri Ram Prakash Tripathi, Advocate holding brief of Sri Dhananjay Awasthi, learned counsel for the complainant and learned A.G.A for the State.
2. The instant bail application has been filed on behalf of the applicant, Shri Roopak Vashishth, with a prayer to release him on bail in Case Crime No. 325 of 2020, under Sections- 132(1), (b), (c), (f), (l) and (i) of C.G.S.T. Act, 2017, Police Station- D.G.G.I, District- Meerut, pendency of trial.
3. There is allegation against the applicant that he is involved in GST registration of fake firms by using pan card, adhaar card and other information of other persons procured fraudulently and by showing fraudulent transaction of such firms for availing fake / bogus Input Tax Credit (ITC). The opposite party conducted search at the registered places of business to verify the existence of such firms but they were not found. Ten firms have collectively availed ITC of Rs. 7,46,88,414/- and fake / bogus invoices involving ITC of Rs. 6,09,85,989/- without any supply of goods / service.
4. Learned counsel for the applicant submits that the applicant has not registered any firm in his name nor has issued any bills. There is no GST registration in his name. A group of persons were engaged in such fake registration and the co-accused, Naresh Kumar and Rajeev Sharma, have misused the personal details of the applicant and have played fraud against him. He has not committed any offence. He has nothing to do with the allegedly fraudulently registered firms. The Panchanama was prepared at his place and complaint has already been filed before the competent court against the applicant. The applicant is in jail since 10.03.2022 and has no criminal history to his credit. There is no reliable evidence against him. Maximum punishment which can be imposed upon him is 5 years. There is non-compliance of provision of Sections 41 and 41-A Cr.P.C.
5. The provision of Section 69 of CGST Act, 2017 have not been complied by the Commissioner. No reason to believe that the applicant has violated provision of Section 32 of CGST Act, 2017 has been brought on record. The applicant is running a photostat copy shop.
6. Learned counsel for the complainant has submitted that the applicant has been rightly implicated in this case and there is ample evidence against him. In the statement of the applicant he has accepted his mobile phone number on which bogus firms with GSTIN were registered. The Commissioner has rightly found reasons to believe that the applicant was required to be arrested. The Apex Court in the case of State of Bihar vs. Anil Kumar, 2017 (13) SCC 751, has held that socio-economic offence constitute a class apart. In the case of Govind Enterprises vs. State of U.P., 2019 (27) GSTL 161 (All), this court has found that mesne-rea regarding offences punishable under Section the CGST Act and IPC are different. The economic offences related to tax evasion of more than 5 crore are cognizable and non-bailable as per Section 132(5) of CGST Act, 2017.
7. This court finds that there is no firm registered in the name of the applicant and he claims that he has no concern with 11 firms registered on pan number of the applicant. From the bank accounts of the applicant, no monetary benefit from illegal availment of ITC were found. The complaint has already been filed against the applicant. The investigation has been conducted and necessary statements have been recorded the details of manipulation by the applicant have been found during the investigation. The details of the alleged shell companies have also been gathered. The facts in the complaint are required to be proved by the prosecution before the special court.
8. The Hon’ble Supreme Court in case of Sanjay Chandra Vs. CBI, [2012 1 SCC 40], has referred the case of State of Kerala Vs. Raneef, [(2011) 1 SCC 784], to observe that in deciding the bail applications an important factor which should certainly be taken into consideration by the court is the delay in concluding the trial. Here, taking into consideration the course of investigation adopted by the Department, the evidence, so collected, the trial will take considerable time and it may happen, if denied bail, the judicial custody of applicant can be prolonged beyond the statutory period of punishment which is five years.
9. Section 132(1)(i) provides for punishment as that ‘in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine; and section 132(2) provides that, where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.
10. Section 138 of the Act makes provision for compounding of offences under the Act, even after the institution of prosecution, on payment by the person accused of the offence, such compounding amount in such manner as may be prescribed. The compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences, on payment of compounding amount as may be determined by the commissioner, the criminal proceeding already initiated in respect of the said offence shall stand abated.
11. Taking into consideration the provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant.
12. The seriousness of the offences alone is not conclusive of the applicant’s entitlement to bail, as held by the Supreme Court inter alia in Sanjay Chandra vs. Central Bureau of Investigation (2012) 1 SCC 40 in the following terms:
“23. Apart from the question of prevention being the object of refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson.
24. In the instant case, we have already noticed that the “pointing finger of accusation” against the appellants is “the seriousness of the charge”. The offences alleged are economic offences which have resulted in loss to the State exchequer. Though, they contend that there is a possibility of the appellants tampering with the witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the Bail Appln. 21/2022 Page 6 of 7 relevant considerations while considering bail applications but that is not the only test or the factor; the other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction both under the Penal Code and the Prevention of Corruption Act. Otherwise, if the former is the only test, we would not be balancing the constitutional rights but rather “recalibrating the scales of justice”.
25. The provision of Cr.P.C. confer discretionary jurisdiction on criminal courts to grant bail to the accused pending trial or in appeal against convictions; since the jurisdiction is discretionary, it has to be exercised with great care and caution by balancing the valuable right of liberty of an individual and the interest of the society in general. In our view, the reasoning adopted by the learned District Judge, which is affirmed by the High Court, in our opinion, is a denial of the whole basis of our system of law and normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognised, then it may lead to chaotic situation and would jeopardize the personal liberty of an individual.”
13. The applicant is in jail since 10.3.2022 and has no criminal history.
14. Keeping in view the nature of the offence, argument advanced on behalf of the parties, evidence on record regarding complicity of the accused, larger mandate of the Article 21 of the Constitution of India and the dictum of Apex Court in the case of Dataram Singh Vs. State of U.P. and another reported in (2018)3 SCC 22 and recent judgement dated 11.7.2022 of the Apex Court in the case of Satendra Kumar Antil Vs. C.B.I., passed in S.L.P. (CRL.) No. 5191 of 2021 and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail.
15. Let the applicant be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to following conditions. Further, before issuing the release order, the sureties be verified.
1. The applicant will surrender his passport, if any, and not to leave the country without permission of the trial court concerned. In case, he has no passport he will file affidavit to this effect before this court.
2. The applicant will furnish bank guarantee of Rs. 10 lacs in favour of the opposite party which shall be forfeited in favour of opposite party in case of violation of any of conditions imposed in this order.
3. The applicant shall not tamper with the prosecution evidence by intimidating/ pressurizing the witnesses, during the investigation or trial.
4. The applicant shall not indulge in any criminal activity or commission of any crime after being released on bail.
5. That the applicant shall not, directly or indirectly, make 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 any police officer;
6. The applicant shall file an undertaking to the effect that he shall not seek any adjournment on the dates fixed for evidence and when the witnesses are present in court. In case of default of this condition, it shall be open for the trial court to treat it as abuse of liberty of bail and pass orders in accordance with law to ensure presence of the applicant.
In case of breach of any of the above conditions, it shall be a ground for cancellation of bail of applicant and forfeiture of the amount of Rs. 10 lacs furnished towards bank guarantee.