2021 (12) TMI 950 - HC - GST

Seeking grant of Regular Bail - evasion of the State Tax to the Govt. by floating bogus firms and showing fake billings and transactions in order to draw the refund of the GST payment - Sections 69 132(1) a b and c of the Punjab Goods and Service Act 2017 - HELD THAT - In the present case the matter already stands investigated qua the petitioner. Moreover the petitioner has been in custody since 09.02.2021. Trial of the case would take time to conclude. No useful purpose would be served by keeping the petitioner behind the bars. Thus the present petition is allowed and the petitioner is ordered to be on regular bail on execution of adequate personal/surety bonds amounting to Rs. 5 lakh to the satisfaction of concerned trial Court/Duty Magistrate - Decided in favor of petitioner.

Summary

Issues:
Bail application under Sections 69 and 132(1) of Punjab Goods and Service Act, 2017.

Analysis:
The petitioner sought regular bail in a complaint case involving evasion of State Tax under Sections 69 and 132(1) of the Punjab Goods and Service Act, 2017. The allegations stated that the petitioner, along with co-accused, engaged in fraudulent activities causing a loss of Rs. 8.95 crore to the State Government by using bogus firms and fake transactions to claim GST refunds. The petitioner denied involvement, stating that the firm in question was operated by his sister-in-law's son, and he had no knowledge or role in the transactions. The petitioner argued that he was falsely implicated and should be granted bail.

The petitioner's counsel challenged the validity of Sections 69 and 132 of the Central Goods and Service Tax Act, 2017, citing a related case where notices were issued to the State of Punjab and the Union of India. It was argued that the arrest under the Punjab Goods and Service Tax Act, 2017, lacked jurisdiction. The petitioner had been in custody for over 10 months, with no further need for investigation. The defense emphasized that the case relied on documentary evidence and keeping the petitioner in custody served no purpose. Previous court orders were cited to support the bail application.

On the contrary, the State counsel contended that the petitioner and co-accused caused substantial tax evasion and issued bogus bills, resulting in a significant loss to the Government. They highlighted a network of firms linked to the accused, emphasizing the seriousness of the allegations and the risk of evidence tampering if the petitioner was released on bail. Reference was made to a Supreme Court decision to support the State's arguments.

After considering the arguments and reviewing relevant court orders, the judge found that keeping the petitioner in custody served no useful purpose. Despite not delving into the case's merits, the judge granted the petitioner regular bail upon execution of personal/surety bonds worth Rs. 5 lakh to the satisfaction of the trial court. The petitioner was required to surrender any passport and seek court permission before leaving India. The judgment clarified that the decision did not reflect an opinion on the case's merits.