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2022 (10) TMI 1224 - HC - GSTSeeking protection from arrest (anticipatory bail) for the alleged offence u/s. 132 of the Central and Maharashtra Goods and Services Tax Act - Availment of irregular ITC - whether the gravity and seriousness of the accusations would require custodial interrogation? - HELD THAT:- Admittedly, there is no final adjudication at the instance of the Department and all the documents required for the purpose of investigation, are already in possession of the respondent and not only this, a sum of Rs.2.22 crores has been paid to the Department though under protest, to establish the bonafides. The investigation being based on documents, the Department has failed to make out any case for custodial interrogation, particularly when the GST Portal has all the supporting documents including the sales and input invoices and even all books of accounts are also filed with the Ministry of Corporate Affairs. The investigation and inquiries are initiated in December 2021, but still there is no crystallization of the accusations barring the show cause notice being issued. In any case, even on conviction, the maximum punishment that would be imposed would be imprisonment upto five years. The present case arises out of a tax dispute and the interest of the respondent no.1 can always be protected on the claim being adjudicated and the tax payer being directed to pay the tax. Moresoever, the offence under the GST Act, except with the limited exception of previous conviction are compoundable. Primarily, the GST is a revenue statute to collect the tax on every transaction of supply of goods or services or both and imposition of penalty is prima facie ancillary purpose of the statute. The order passed by the Addl. Sessions Judge, Mumbai, rejecting the Anticipatory Bail Application, perfunctory in nature as except recording that the nature of offence being economic one, the same is rejected. A balance has to be struck between the principle of liberty and the right of the Department to investigate. The learned Judge has recorded a prima facie finding that the applicants are actively involved in the act of availing ITC without actual movement of goods or services, and therefore, the protection is denied. There is no discussion about the need for custodial interrogation of the applicant and whether the custody would be warranted when the offence is punishable with an imprisonment of less than 7 years. In the event of their arrest, the Applicant no.1 Narendra Amrutlal Patel and applicant no.2 Ashok Girdharilal Mewani shall be released on bail on furnishing P.R. bond to the extent of Rs.50,000/- each with one or more sureties of the like amount and other conditions imposed - application allowed.
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