1. The matter is taken up through hybrid arrangement (virtual/physical) mode.

2. The Petitioner being in custody in connection with P.R. No.02 of 2020-21 dated 17.12.2020 of Deputy Commissioner of State Tax, CT & GST Enforcement Unit, Bhubaneswar, corresponding to 2(C) CC Case No.317 of 2021 registered for commission of offences punishable under section 132 (1)(b)(c) and (1) of OGST Act, 2017 which punishable under Section- 132(1)(i) of the Act, has filed this application under Section-439 of the Code of Criminal Procedure for his release on bail.

3. Mr. M.K. Mishra, Learned Senior Counsel for the Petitioner submitted that the complaint contains the allegations that the Petitioner being the proprietor of M/s. S.R. Enterprises in collusion with others managing in showing the receipt of purchase invoices in the name of fake firms without physical receipt of goods and issuing sale invoices without onward physical movement of the goods has wrongfully availed and passed on bogus Input Tax Credit (ITC) on the strength of those fake invoices in defrauding the State exchequer. He submitted that the allegations also include that there was supply of the goods purchased out of accounts from clandestine sources without obtaining invoices and without payment of tax besides creation and operation of dummy firms in the name and style of M/s. Kuladia Traders and others in collusion with one Sri Sandip Mohanty and others and thus has been the availment and passing of bogus ITC in the name of said firms as alleged. It was submitted that the Petitioner is no way involved in the commission of offences as alleged and he has been arrested in the case on frivolous grounds without determining tax liability and by erroneous calculation of ITC allegedly so availed. According to him, no such material has also surfaced to show the indulgement of the Petitioner in the business affairs of other firms(s) and the entire prosecution case is based on documentary evidence which by now have been collected. He submitted that the Petitioner has remained in custody since 28.06.2021 and now his release on bail would cause no hindrance on the path of a free and fair investigation more particularly when complaint has already been filed in the Court. It was submitted that the Petitioner being a permanent resident of Bhubaneswar, there is no scope on his part to flee from justice and after collection of the materials, the Authority having seized the relevant documents; the questions of tampering the evidence by the Petitioner and thereby influencing the trial do not arise. In view of all these above, he urged for grant of bail to the Petitioner as according to him, further detention of the Petitioner in custody in this case would serve no useful purpose and as such is not warranted.  

4. Mr. Sunil Mishra, learned Addl. Standing Counsel for the SGST vehemently opposed the move. He submitted that the Petitioner is involved in commission of economic offences of huge magnitude and the materials collected so far reveal that the Petitioner had all the role in defrauding the State Exchequer to the tune of huge sum by availing the ITC simply by managing to have the transactions reflected in the papers without physical movement of the goods and in the process has created numerous fake documents such as invoices, bills etc., besides having the hand in creating and operating the fake firm(s) having no existence in the Commercial World. It was submitted that the investigation is still under way and the materials collected so far reveal the active involvement of the Petitioner in the matter. According to him, as of now, it has been ascertained that the Petitioner in operating fictitious firm(s) had availed and passed on bogus ITC of ₹ 10.75 crores and ₹ 6.25 crores respectively.

It was pointed out that the activities of the Petitioner being trekked shows as to how he obtained the registration certificate under the GST Act in the name of style of M/s. S.R. Enterprises, misrepresenting the facts and furnishing false informations only for the purpose. He submitted that the investigation is going on and in view of the peculiar nature of the offence and its manner of commission; it’s a time consuming affair as the verifications of the transactions which progressing; now facts are pouring in. According to him, stage has not yet reached to say that no further material is likely to surface when verifications from all such fraudulent activities from all possible angles are not over. He, expressed strong apprehension that in the event, the Petitioner is enlarged on bail, he may tamper the evidence posing hurdles in the investigation.

5. Keeping in view the submissions made; I have gone through the complaint petition as well as the documents annexed thereto. It is stated that the Petitioner as the proprietor of M/s. S.R. Enterprises has availed bogus ITC worth of ₹ 9.35 crores without physical receipt of goods on the strength of fake invoices obtained in the name of fake and non-existent firms and passed on bogus ITC worth ₹ 9.65 cores without the supply of goods in the reality and those are in favour of recipient firms inside and outside the State of Odisha. All those firm members have given their statements in the directions. It is stated that the Petitioner was purchasing goods out of account from different sources without obtaining tax invoices and without payment of tax as ascertained from the Bank Accounts of those firms. In order to regularize the transactions, it is said that at the time of effecting sales, he was arranging purchase invoices against the goods purchased out of account from fake and non-existent firms and was taking adjustment of ITC in violation of law. In this way, it is said that the Petitioner was going on defrauding the State exchequer which so far stand at ₹ 19.04 crores (both passing and availment of ITC).

6. The Petitioner is said to have been involved in the above specific economic offences of quite significant magnitude which are considered to be grave. Such dubious roles alleged to have been played by the Petitioner stand in the direction of making hefty unlawful and unimaginable financial gain by giving the show that for such sincere involvement in the business and carrying out the same, his entitlement to the huge sum as incentive in the form of Input Tax Credit (ITC) flowed which he received, but in reality as per the case laid, it is having the tendency of foiling the whole idea behind the introduction of the new Tax Regime so as to achieve the objective of speeding up the run of the Nation to stand at the forefront having a key position in the economic map of the globe.

7. With all these aforesaid, I am not inclined to accept the present move for grant of bail to the Petitioner.

8. Accordingly, the BLAPL stands dismissed.

Issue urgent certified copy as per rules.