Bail Granted in GST Evasion Case; Trial Delay Considered
Issue: Whether bail should be granted to an assessee accused of GST evasion through the passing of ineligible Input Tax Credit (ITC) to various firms using non-existent firms.
Facts:
- The assessee was accused of passing on ineligible ITC to various firms through non-existent firms.
- The assessee contended that he was falsely implicated, that the proceedings were initiated without following statutory provisions, and that no evidence supported the allegations.
Decision:
- The court held that the conclusion of the trial may take some more time.
- The court held that the assessee was entitled to be released on bail upon furnishing a personal bond with two local sureties.
Key Takeaways:
- Trial Delay: The court considered the potential delay in the conclusion of the trial as a factor in granting bail.
- Presumption of Innocence: The court acknowledged the assessee’s contention that he was falsely implicated and that there was a lack of evidence, reflecting the presumption of innocence until proven guilty.
- Bail Conditions: The court imposed conditions for bail, including furnishing a personal bond with two local sureties.
- Section 132 of Central Goods and Services Tax Act, 2017/Chhattisgarh Goods and Services Tax Act, 2017: This section deals with offences and penalties.
- Section 483 of Bharatiya Nyaya Sanhita, 2023: This section of the new criminal code deals with bail.
- The court is balancing the need for investigation and prosecution with the individual’s right to liberty, especially when the trial is likely to be prolonged.
HIGH COURT OF CHHATTISGARH
Rohit Singla
v.
SIO (Senior Intelligence Officer)
Ramesh Sinha, CJ.
MCRC No. 8694 of 2024
JANUARY 23, 2025
Vivek Tankha, Senior Adv. and Ashish Tiwari, Adv. for the Petitioner. Maneesh Sharma, Adv. for the Respondent.
ORDER
1. This is the first bail application filed under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023 for grant of regular bail to the applicant who has been arrested in connection with Crime No. 1191/GST/2024/-25 registered at Police Station Directorate General of GST Intelligence, Raipur Zonal Unit, for the offences punishable under Section 16, Section 132(1)(b), 132(1)(c) and 132(1)(f) of the Central Goods and Services Tax Act, 2017.
2. prosecution’s story is that the Central GST authorities received confidential information that Rohit Singla/accused was passing on unauthorized Input Tax Credit (ITC) to various firms through nonexistent firms. Based on this information, an investigation was conducted, which revealed that the accused, Rohit Singla, had passed on crores of rupees in unauthorized ITC to various firms without actual supply of goods, merely on the basis of invoices. It has been alleged that a total amount of Rs. 11,12,22,316/- was passed on as ITC by non-existent firms, causing loss to the government exchequer. Consequently, a case was registered against the applicant/accused under Crime No. 1191/CGST/2024-2025, under sections 132(1)(b), 132(1)(c), and 132(1)(f) of the CGST Act, and the accused was arrested.
3. Learned counsel for the applicant submits that the present applicant is innocent person and has been falsely implicated in the aforesaid case. He submits that the allegations made by the respondent in relation to Crime Case No. 1191/GST/2024-25 do not meet the basic ingredients of the offenses leveled against the applicant. Moreover, the proceedings were initiated without complying with the statutory mandate of the CGST 2017, specifically sections 73/74. He further submits that the lower Court mechanically relied on the case diary without addressing the applicant’s contentions, despite noticing them. Furthermore, the Court failed to provide reasons for denying bail. Such a non-speaking order is invalid in the eyes of the law and deserves to be set aside. He also submits that the criminal proceedings were initiated to falsely accuse the applicant of availing ineligible Input Tax Credit (ITC) by denying the existence of genuine goods supply. The respondent has no evidence to support these allegations. The lower court passed the impugned order dated December 5, 2024, in an erroneous and mechanical manner, without applying the law prescribed in the CGST 2017 and relevant judicial precedents regarding bail for accused individuals under section 132 of the CGST 2017. The applicant is a law-abiding citizen with no criminal antecedents and deep roots in society. There is no risk of him evading cooperation in the investigation. He further contended that The applicant is not a flight risk and undertakes not to tamper with evidence or influence witnesses. He also undertakes to cooperate in the investigation by appearing before the respondent. The applicant shall abide by the terms and conditions of the bail imposed by this Hon’ble Court and is ready to furnish adequate surety. He shall comply with all directions and conditions imposed by this Hon’ble Court. He submits that the applicant is in jail since 22.11.2024, conclusion of the trial may take some time, therefore, he prays for grant of regular bail to the applicant.
4. On the other hand learned counsel appearing for the non-applicant opposes the bail application of the present applicant and submits that the department received confidential information that the accused was passing on unauthorized Input Tax Credit (ITC) in the name of two different firms. Investigation revealed that the accused passed on crores of rupees in unauthorized ITC to various firms without actual supply of goods, solely based on invoices. It was also found that the accused used non-existent fake firms to pass on unauthorized ITC to various firms. Therefore, he is not entitled for grant of regular bail in the present case.
5. I have heard learned counsel for the parties and perused the case diary.
6. Taking into consideration the facts and circumstances of the case and further the fact that complaint has already been field against the applicant/accused and the further investigation is going on, moreover, the applicant is in jail since 22.11.2024, conclusion of the trial may takes some more time. Therefore, this Court is of the view that the present applicant is entitled to be released on bail in this case.
7. Let the Applicant – Rohit Singla, involved in Crime No. 1191/GST/2024/-25 registered at Police Station Directorate General of GST Intelligence, Raipur Zonal Unit, for the offences punishable under Section 16, Section 132(1)(b), 132(1)(c) and 132(1)(f) of the Central Goods and Services Tax Act, 2017, be released on bail on furnishing personal bond with two local sureties in the like sum to the satisfaction of the Court concerned with the following conditions:-
| (i) | The applicant shall file an undertaking to the effect that he shall not seek any adjournment on the dates fixed for evidence 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. |
| (ii) | The applicant shall remain present before the trial court on each date fixed, either personally or through his counsel. In case of his absence, without sufficient cause, the trial court may proceed against him under Section 269 of Bharatiya Nyaya Sanhita. |
| (iii) | In case, the applicant misuses the liberty of bail during trial and in order to secure his presence, proclamation under Section 84 of BNSS. is issued and the applicant fails to appear before the court on the date fixed in such proclamation, then, the trial court shall initiate proceedings against him, in accordance with law, under Section 209 of the Bharatiya Nyaya Sanhita. |
| (iv) | The applicant shall remain present, in person, before the trial court on the dates fixed for (i) opening of the case, (ii) framing of charge and (iii) recording of statement under Section 351 of BNSS. If in the opinion of the trial court absence of the applicant is deliberate or without sufficient cause, then it shall be open for the trial court to treat such default as abuse of liberty of bail and proceed against him in accordance with law. |
8. Office is directed to send a certified copy of this order to the trial Court concerned for necessary information and compliance forthwith.