1. This matter is taken up through Hybrid Arrangement (Virtual/Physical Mode).

2. This is the 2nd journey of the Petitioner who is in custody in connection with No. P.R.02 of 2020-21 dated 17.12.2020 of the CT & GST Enforcement Unit, Bhubaneswar corresponding to 2(C) CC Case No. 317 of 2021 on the file of learned J.M.F.C., Bhubaneswar running for commission of offences punishable under section 132 (1)(b)(c) and (1) of Odisha Goods and Services Tax Act, 2017 (for short called as ‘OGST Act’), in filing this application under section 439 of the Cr.P.C. for his release on bail.

3. Prosecution allegations run to the effect that this Petitioner being the proprietor of M/s. S.R. Enterprises in collusion with others had been 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 and thereby has wrongfully availed and passed on bogus Input Tax Credit (ITC) on the strength of those fake invoices in defrauding the State exchequer. It is also said 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 to the tune of ₹ 10.75 and ₹ 6.25 crores and thus it is said that there has been the availment and passing of bogus ITC in the name of the said firms as alleged.

4. Learned Senior Counsel for the Petitioner submitted that the Petitioner has made all genuine sale and purchase of goods using genuine GSTN and has paid the GST. It was thus submitted that the Petitioner is no way involvement in commission of offences as alleged and he has been arrested in the case on frivolous ground without determining the tax liability and by erroneous calculation of the ITC as alleged when it is said that accused Sandip Ku. Mohanty is the main accused and this Petitioner is said to have been in collusion with him. He further submitted that except mere inferences which are also too weak, no such material has come on record to show the indulgent of the Petitioner in the business affairs of other firms when the Petitioner has in his statement has explained that accused Sandeep Mohanty was supplying his goods in the name of different fake firms and he was making payment to said Sandeep. He further submitted that lastly in a general manner, it is said that thereby huge ITC has been passed on and availed of. He also submitted that entire prosecution case is based on documentary evidence which by now have already been seized when the Petitioner has remained in custody for about five months. So it was submitted that at this stage, the scope on the part of the Petitioner to tamper with any such evidence stands foreclosed. He submitted that the Petitioner being a permanent resident under jurisdiction of Khandagiri Police Station, Bhubaneswar, there arises no scope for the Petitioner to flee from justice. It was submitted that the complaint was lodged in the Court of Law from the beginning and now in view of lapse of time and collection of all such materials when the Authority have already seized all the relevant documents to which the Petitioner has no more the access, the question of tampering the evidence and influencing the trial in that way do not arise. In view of all these above, further inviting the attention of the Court to the relevant provision of the statute prescribing the maximum punishment for five years and fine for the alleged offences, he urged for reconsideration of the prayer for grant of bail as according to him, further detention of the Petitioner in custody in connection with the case would serve no useful purpose save and except standing to the sufferance of the Petitioner and the family members which according to him would amount to denial of fair assessment to the Petitioner. In support of the prayer of the Petitioner for reconsideration of grant of bail, he has invited the attention of the Court to the orders passed by this Court in case of Rama Chandra Mallick vs. State of Odisha & Others (BLAPL No. 10958of 2019 disposed of on 17.3.2020) and Pramod Kumar Sahoo vs. State of Odisha & Others (BLAPL No. 4125 of 2020 disposed of on 23.12.2020) in granting bail to the Petitioners therein.

5. Learned Addl. Standing Counsel, CT & GST opposed the move. He submitted that the prayer for grant of bail to the Petitioner having earlier been rejected in BLAPL No. 5883 of 2021, there is no change in the circumstances for reconsideration of the said prayer. According to him, the Petitioner being involved in commission of economic offence and on the face of the materials collected that the Petitioner had all the role in defrauding the State Exchequer to the tune of huge sum by passing over bogus ITC and receiving the ITC simply by managing to have the transactions reflected in the papers without physical movement of the goods or services and in the process has created numerous fake documents such as invoices, bills etc. besides having the hand in creating and operating the fake Firms and opening Bank accounts in the name of those entities which have no existence in reality in the commercial field; merely basing upon the factum of detention of the Petitioner in custody for about five months, this subsequent move for release of the Petitioner on bail has to fail.

He submitted that the materials would show that the Petitioner was involved in the matter with the intention to defraud the State Exchequer by way of creation and operation of such fictitious business entities including those existing and he to have proceeded in that mission. He submitted that with the collection of all such materials further investigation is in progress and the Petitioner being an influential person may try to win over the public witnesses and attempt to erase the money trail of the alleged crime as also may an attempt to influence the proprietors of the different firms created for the purpose. In support of the submission as to non-consideration of the prayer for grant of bail, he relied upon the decisions in case of Nimmagadda Prasad vs. Central Bureau of Investigation; (2013) 7 SCC 466; Y.S. Jagan Reddy vs. Central Bureau of Investigation; (2013) 7 SCC 439 and others.

6. Keeping in view the submission, I have perused the materials as placed and have further gone through the written notes of submission with the citations.

7. The Hon’ble Apex Court in case of “Niranjan Singh and another vs. Prabhakar Rajaram Kharote and others”; (1980) 2 SCC 559 has observed which has also been reiterated in case of “Shri P.Chidambaram vs. Central Bureau of Investigation”; (Criminal Appeal No. 1603 of 2019 disposed of on 22.10.2019) that at the stage of consideration of the matter for granting bail, detailed examination of evidence and elaborate documentation of the merits of the case should be avoided.

8. In case of Shri P.Chidambaram (supra), it has been held by the Hon’ble Apex Court as under:-

“The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail:-

(i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution;

(ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses;

(iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence;

(iv) character behaviour and standing of the accused and the circumstances which are peculiar to the accused;

(v) larger interest of the public or the State and similar other considerations (vide Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280). There is no hard and fast rule regarding grant or refusal to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion 17 of the court has to be exercised judiciously and not in an arbitrary manner”.

9. In “Kalyan Chandra Sarkar v. Rajesh Ranjan and another”; (2004) 7 SCC 528, the Hon’ble Apex Court has said as under:-

“11. The law in regard to grant or refusal of bail is very well settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non-application of mind. It is also necessary for the court granting bail to consider 18 among other circumstances, the following factors also before granting bail; they are:

(a) The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence.

(b) Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant.

(c) Prima facie satisfaction of the court in support of the charge. (See Ram Govind Upadhyay v. Sudarshan Singh (2002) 3 SCC 598 and Puran v. Rambilas (2001) 6 SCC 338.)” Referring to the factors to be taken into consideration for grant of bail, the Hon’ble Apex Court in “Jayendra Saraswathi Swamigal v. State of Tamil Nadu”; (2005) 2 SCC 13, it has been said that:-

“16. …….The considerations which normally weigh with the court in granting bail in non-bailable offences have been explained by this Court in State v. Capt. Jagjit Singh AIR 1962 SC 253 and Gurcharan Singh v. State (Delhi Admn.) (1978) 1 SCC 118 and basically they are – the nature and seriousness of the offence; the character of the evidence; circumstances which are peculiar to the accused; a reasonable possibility of the presence of the accused not being secured at the trial; reasonable apprehension of witnesses being tampered with; the larger interest of the public or the State and other similar factors which may be relevant in the facts and circumstances of the case……”

After referring para (11) of “Kalyan Chandra Sarkar, in State of U.P. through CBI v. Amarmani Tripathi”; (2005) 8 SCC 21, the Hon’ble Apex Court has held as under:-

“18. It is well settled that the matters to be considered in an application for bail are

(i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence;

(ii) nature and gravity of the charge;

(iii) severity of the punishment in the event of conviction;

(iv) danger of the accused absconding or fleeing, if released on bail;

(v) character, behaviour, means, position and standing of the accused;

(vi) likelihood of the offence being repeated;

(vii) reasonable apprehension of the witnesses being tampered with; and

(viii) danger, of course, of justice being thwarted by grant of bail [see Prahlad Singh Bhati v. NCT, Delhi (2001) 4 SCC 280 and Gurcharan Singh v. State (Delhi Admn.) (1978) 1 SCC 118]. While a vague allegation that the accused may tamper with the evidence or witnesses may not be a ground to refuse bail, if the accused is of such character that his mere presence at large would intimidate the witnesses or if there is material to show that he will use his liberty to subvert justice or tamper with the evidence, then bail will be refused……..”.

10. In the given case, the complaint has been lodged against the Petitioner and others for commission of the aforesaid offences under section 132(1)(b)(c) and (1) of the OGST Act. The maximum punishment prescribed thereunder is the imprisonment for a term of five years and with fine in case the amount of tax evaded or the ITC wrongly availed or utilized or the amount of refund wrongly taken exceeds ₹ 500.00 lakh. The investigation having commenced, it appears that extensive searches of business premises and the house of the Petitioner and other connected premises have already been conducted and a large number of documents have also been seized pursuant to the said search. All these are in custody of the complainant to which the Petitioner is having no more the access.

The prosecution case is mainly based upon the documents in respect of the so-called clandestine business activities. The complaint having already been filed, the Petitioner has been in custody since 28.6.2021. The Petitioner is a permanent resident under jurisdiction of Khandagiri Police Station, Bhubaneswar in the district of Khurda and as such hardly there remains the scope for him to flee away from justice. The proceeding for assessment of the GST payable for the transactions may be continuing where the party aggrieved may further carry Appeal and Revision as provided in law. Till such time at the stage of hearing of the application for grant of bail it may be difficult to prejudge the guilt of the Petitioner in ascertaining the exact quantum involved. The assessment in such matter is largely based on documents and relevant records which would take its own time.

In such circumstances of the case on hand, no other materials are placed to support that further detention of the Petitioner still stands as of necessity for the case. In the meantime, about five months have passed since the detention of the Petitioner in custody and thus those stages of the investigation here appear to be over when it can be said that the Petitioner being enlarged on bail may stand on the way of proper investigation in collecting all the materials triggering derailment of investigation process with the possibility of the Petitioner influencing the witnesses and absconding on which scores there too stand no material particulars..

11. In view of all these aforesaid, this court feels inclined to reconsider the prayer for grant of bail to the Petitioner. Accordingly, it is directed that the Petitioner be released on bail on furnishing bail bond of ₹ 35,00,000/- (Rupees thirty five lakhs) with two sureties for the like amount to the satisfaction of the learned court in seisin of the case with the following conditions that:-

(i) the Petitioner shall not in any manner make any inducement, threat or promise to the prosecution witnesses so as to dissuade them from disclosing truth before the Court and shall not tamper with the evidence;

(ii) the Petitioner shall not be indulge himself in similar activity;

(iii) the Petitioner shall surrender his passport if any before the learned court in seisin of the case and will not leave India without prior permission of the Court and in the event the Petitioner has not been issued with any passport, he would submit an affidavit stating the said fact; and

(iv) the Petitioner shall appear before the concerned Authority as would be so required for the purpose. Violation of any of the above condition(s) shall entail cancellation of bail.

12. The BLAPL is accordingly disposed of. Issue urgent certified copy as per rules.