Brief Facts
- The present bail application was filed under Section 439 Cr.P.C. by the petitioner, who was arrested on 02.11.2023 in connection with offences under Sections 132(1)(b), (c), (f) and (l) of the Central Goods and Services Tax Act, 2017. The complaint was filed by the Directorate General of Goods and Services Tax Intelligence (DGGI), Jaipur Zonal Unit on 30.12.2023.
- The prosecution case was that the petitioner created and operated a large number of fake firms for issuing fake invoices without supply of goods and fraudulently availed and passed on inadmissible Input Tax Credit (ITC). Initially, it was found that 181 fake firms were created, involving ITC of `679 Crores, which later increased to 294 fake firms involving ITC of `1,032 Crores. The petitioner’s statements were recorded under Section 70 of the CGST Act, 2017.
- The petitioner sought bail on the grounds that the alleged offence was punishable with a maximum sentence of five years, triable by the Court of Magistrate First Class, and that the statements recorded under Section 70 were not admissible at this stage in view of Section 136 of the CGST Act.
Issues
- Whether the petitioner was entitled to bail merely on the ground that the offence under Section 132 CGST Act is punishable with imprisonment up to five years and triable by a Magistrate?
- Whether economic offences involving large-scale tax evasion and fake ITC require a different approach in the matter of bail?
- Whether parity could be claimed when the bail application of a similarly placed co-accused had already been rejected.
Held
- The Court examined the nature and gravity of economic offences under the CGST Act, the evidentiary material collected during investigation, the role attributed to the petitioner, and the principles governing grant of bail in cases involving economic offences. Reliance was placed on the judgments of the Supreme Court in Nimmagadda Prasad v. CBI 2013(7) SCC 466, Surjeet Singh Chhabra v. Union of India 1997 (1) SCC 508, Naresh J. Sukhawani v. Union of India 1995 Supp (4) SCC 663, and other precedents. The findings of the Court are as under:
- The Court held that economic offences constitute a class apart and are required to be dealt with a different approach in the matter of bail. Considering the huge loss caused to the public exchequer, the role of the petitioner in creating and operating fake firms, and the fact that the bail application of a similarly situated co-accused had already been rejected, the Court found no ground to enlarge the petitioner on bail. Accordingly, the bail application was rejected. The Court opined the following:-
- A common man of this Country is paying all kinds of taxes including CGST and SGST to the Central and State Government for development and building of the Nation and the State but the person like the petitioner is causing obstruction in the development of the Nation as well as the State by creating fake firms and causing huge loss of Rs.10.32,91,88,876/- to public exchequer. Such act of economic offence committed by such accused person like the petitioner, is required to be dealt with a different approach in the matter of bail.
- This Court finds no substance in the arguments of the counsel for the petitioner that the petitioner is entitled to get bail merely because the alleged offence under Section 132 of the CGST Act, 2017 is punishable with an imprisonment of five years and the same is triable by the Court of Magistrate First Class. There cannot be any straight jacket formula to decide the bail applications in favour to the accused merely because the alleged offence is triable by the Court of Judicial Magistrate First Class and the same is punishable with an imprisonment of five years only. Every bail application is required to be decided on its own facts and circumstances and the merits of the case. Every case has different facts and allegations and while deciding the bail applications, the Court has to keep the nature of evidence and accusation in mind and then decide the bail applications accordingly.
Relevant Para No.
- 4 to 9, 12 to 14