ORDER

The applicant, by way of this application filed under Section 439 of the Code of Criminal Procedure, seeks regular bail in connection with the File No.DGGI/AZU/GR D/12(4)471/21-22 registered with Directorate General of GST Intelligence, Ahmedabad Zonal Unit, Ahmedabad for the offences punishable under Sections 132(1)(b) and 132(1)(c) read with Sections 132(1)(i) and 132(5) of Central Goods and Services Tax Act (hereinafter referred to as ‘CGST Act’) and Sections 132(1)(b) and 132(1)(c) read with Sections 132(1)(i) and 132(5) of Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as ‘GST Act’).

2. The applicant was arrested on 24.02.2022 and produced before the Court of learned Metropolitan Magistrate and since then, he is in judicial custody. His bail application filed before the Court of Sessions Court, came to be rejected vide order dated 22.06.2022. The complaint as contemplated under the provisions of the Act is filed on 22.04.2022 by the Authority concerned. Feeling aggrieved by the refusal to grant bail by the Court concerned, the applicant has preferred present application to grant him regular bail.

3. This Court has heard Mr. Asim Pandya, learned Senior Counsel assisted by Mr. Gaurav Vyas, learned counsel for and on behalf of the applicant, Mr. Dhaval Vyas, learned Standing Counsel for the respondent no.2 and Mr. Manan Maheta, learned APP for the respondent-State and Department.

4. The brief facts leading to filing of the present application are that:

4.1 The Officer of GST Intelligence, Zonal Unit, Ahmedabad received specific intelligence from the Surat Office to the effect that some entities are engaged in the fraudulent transfer of Input Tax Credit (hereinafter referred to as “ITC”) without actual supply of corresponding goods, whereby, caused evasion of huge amount of tax. It is in these background facts, the search was conducted at the residential premises of the present applicant Upendra Rana. During the search proceedings, the authority have seized cash Rs.64 lakhs and various incriminating documents, invoices, bills in respect of firms namely M/s. V.V. Enterprise, Mehta Enterprise, Shiv Enterprise, Krishna Enterprise and V.K. Enterprise. After careful examination of the seized material, it was revealed that the applicant Mr. Rana was the operator of 11, non-existing firms and had supplied invoices in the name of said non-existing firms to the beneficiaries/and users, by instructing them to make the payment into the specific bank account and withdrawal of the cash after transfer of the amount. It is in this context, the authority came to a conclusion that, the applicant is involved in managing or rotation of cash in the fake invoice chain to avail fraudulent ITC to the tune of Rs.10.20 crores and passing on it on the basis of tax invoices without having receipt of actual corresponding goods, in contravention of the statutory mandatory provisions of the Act and have committed the offence as referred above.

5. Mr. Asim Pandya, learned Senior Counsel urged the following contentions:

(i) No offence as alleged is made out against the applicant and his arrest is in contravention of mandatory provisions and rules made thereunder, as, power under Section 69 should be used sparingly and reasons must be recorded for the arrest. In the facts of present case, while arresting the applicant, no sufficient reasons were being assigned by the authority and Court concerned failed to appreciate the facts that the reasons are totally imaginery, without any sufficient material on record.

(ii) During the search, the authority have seized cash amount of Rs.64 lakhs and considering the alleged amount, the applicant herein without prejudice to his rights and contentions willing to deposit 10% of the amount within a period of four months from the date of his release before department and he will also file an undertaking to this effect.

(iii) The investigation qua the applicant is virtually over and during the search and seizure, necessary documents have been seized and same is with the department and therefore, the prosecution failed to point out that the further custody of the applicant is necessary.

(iv) Complaint as contemplated under the Act has been filed by the department. Investigation is over. Applicant is permanent resident of Ahmedabad and he having roots in the society. The maximum punishment is up to five years and case is triable by Magistrate and the offence is compoundable one and case would not likely to conclude in a reasonable time.

(v) Lastly, it is submitted that, considering the pendency of the additional Metropolitan Magistrate, Ahmedabad, there is no possibility to conclude the trial in a reasonable time. Therefore, keeping behind bar the applicant for an indefinite period would certainly violate the fundamental rights of freedom as guaranteed under Article 21 of the Constitution of India, as the basic jurisprudence of the bail is that, “Bail is a rule and jail is an exception.”

6. In the aforesaid contentions, considering the facts and circumstances of the present case, it is prayed that, discretion may kindly be exercised in favour of the applicant.

7. Mr. Dhaval Vyas, Standing Counsel appearing for the respondent no.2-Department and Mr. Manan Maheta, learned APP for the respondent-State, reiterating the contents of the sworn affidavit contended that, the applicant is managing the affairs of 11 non-existing firms and had supplied invoices in the name of said firms to the beneficiaries and fraudulently availed and passing on ITC, causing loss to the Government Exchequer to the extent of Rs.10.20 crores. It is further submitted that, in order to claim bogus ITC, the applicant have generated and supplied fake invoices and created forged documents. In such circumstances, it is submitted that, the family members of the applicant are still at run and investigation which is still underway and therefore, if bail is granted, their exists potential risk that the applicant may manipulate or attempt to destroy the evidences. Thus, the offence is an economic offence, affecting the society at large, the applicant should not be enlarged on bail so as to ensure proper investigation.

8. Hear at length the learned counsel for the respective parties and perused the material placed on record.

9. Before adverting to the contentions raised by learned advocates appearing for the respective parties, it is necessary to refer to the judgment delivered by the Apex Court in the case of P. Chidambaram Vs. Directorate of Enforcement, (2020) 13 SCC 791, i.e. “even allegations of grave economic offence, it is not a rule that bail should be denied in every case and whether bail is granted or not, will have to be on the case to case basis of the facts involved therein and securing the presence of the accused to stand trial.” I deem it fit to exercise the discretion in favour of the applicant.

10. In the facts of the present case, during search proceedings, the incriminating material relevant for the investigation purpose have been seized and recovered by the department. The applicant is in custody since 24.02.2022 and after filing the complaint before the Magesterial Court, there is no progress in the trial and it will take considerable time. The entire case is based on documentary evidence. The department failed to point out that further custody of the applicant is necessary. The department has already recovered and seized Rs.64 lakhs and the applicant has shown his bonafide to deposit amount of 10%. In such circumstances, considering the facts and circumstances of the present case and the role attributed to the present applicant, when investigation qua him is virtually over, keeping him behind bar would not serve any further purpose. Therefore, I am inclined to release the applicant on bail subject to deposit of Rs.38 lakhs, before the Office of respondent no.2 at Ahmedabad within a period of four months in four equal installments from the date of his release. It is to be noted that, Rs.64 lakhs have already been recovered from the applicant. The department is directed to accept the amount. The applicant shall file an undertaking to the this effect before the Court concerned and this Court within a period of 15 days from the date of his release. If the applicant fails to comply with the condition, the bail granted to the applicant shall stands cancelled automatically.

11. Hence, present application is allowed and the applicant is ordered to be released on regular bail in connection with the File No.DGGI/AZU/GR D/12(4)471/21-22 registered with Directorate General of GST Intelligence, Ahmedabad Zonal Unit, Ahmedabad, 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;

12. The Authorities will release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, the Sessions Judge concerned will be free to issue warrant or take appropriate action in the matter. Bail bond to be executed before the learned Lower Court having jurisdiction to try the case. It will be open for the concerned Court to delete, modify and/or relax any of the above conditions, in accordance with law. At the trial, learned Trial Court shall not be influenced by the observations of preliminary nature, qua the evidence at this stage, made by this Court while enlarging the applicant on bail. Rule is made absolute to the aforesaid extent. Direct service is permitted.