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2025 (5) TMI 1251 - DSC - GSTApplication for grant of anticipatory bail - modus operandi involving the generation of fake invoices and paper firms - ineligible Input Tax Credit - illegal circulation of copper scrap sourced from the local market without proper invoicing - GST evasion - HELD THAT - It is not the case of Department that applicant has not answered the question truthfully or whatever information given by applicant is incorrect. In the reply to the application and in oral contention it has been stressed that applicant has not joined the investigation but no submissions were made qua the fact that applicant was examined on 15.2.2025. It shows that applicant is not shying away from joining the investigation but apprehending his arrest he informed the court. The conduct of accused was assailed and it was argued that applicant is not entire for discretionary relief but the record of Department reflects otherwise that applicant did appear before Department and gave answers veracity of which is not disputed till arguments in this matter. No apprehension has been expressed that applicant might flee from the course of justice and even if such apprehension exist no concrete material placed on record to buttress this contention. Therefore arguments on behalf of Department cannot be accepted for denying the relief sought by applicant. Hence it is directed that applicant shall be admitted in bail in case Department reaches a conclusion in terms of section 69 of GST Act that applicant is required to be arrested subject to furnishing bail bond of Rs. 2, 00, 000/- with one surety of like amount who shall be blood relation of applicant and further subject to following conditions Thus the application stands disposed of accordingly.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of anticipatory bail application at the stage of investigation Relevant legal framework and precedents: The Court referred to the Supreme Court judgment in Gurbakash Singh Sibbia & Ors. v. State of Punjab, which established the principle that anticipatory bail applications are maintainable even before arrest and at the stage of issuance of summons. The recent decision in Radhika Aggarwal v. Union of India was also relied upon to support maintainability of anticipatory bail applications during the investigation phase. Court's interpretation and reasoning: The Court accepted that anticipatory bail applications can be filed before arrest or even at the summons stage, especially when the applicant apprehends arrest. The earlier order from the Faridabad court returning the application for lack of jurisdiction was noted, and the present application was deemed maintainable before the competent court at Delhi. Key evidence and findings: The applicant had already appeared before the investigating officers on 14.02.2025 and 15.02.2025 and had recorded his statement, indicating cooperation with the investigation. Application of law to facts: Since the applicant had not been arrested but apprehended coercive action, and had appeared voluntarily before the authorities, the application for anticipatory bail was held to be maintainable. Treatment of competing arguments: The Department's contention that the applicant was evading investigation was countered by the fact that the applicant had appeared and answered questions. The Court found no merit in the Department's assertion that the application was premature or not maintainable. Conclusion: The anticipatory bail application was maintainable at this stage of investigation. Issue 2: Entitlement to anticipatory bail considering the gravity of allegations and evidence Relevant legal framework and precedents: The Court considered Section 69 of the CGST Act, 2017, which empowers authorities to arrest in cases of GST evasion. The Supreme Court's rulings in cases such as Vineet Jain v. Union of India were cited, which held that in cases where evidence is primarily documentary, anticipatory bail should ordinarily be granted unless extraordinary circumstances exist. Court's interpretation and reasoning: The allegations against the applicant involve GST evasion of approximately Rs. 75 crore through a premeditated scheme involving fake invoices and paper firms. Co-accused persons have already been arrested for similar offences involving lower amounts. The Court recognized that the gravity of the offence is serious, but noted that the evidence is largely documentary and that the applicant's conduct did not indicate attempts to flee or tamper with evidence. Key evidence and findings: The applicant's statement was recorded, and no contradiction or falsehood was found in his responses. The Department had not yet decided whether to arrest the applicant but acknowledged the serious nature of allegations and the possibility of arrest in the near future. Application of law to facts: The Court balanced the seriousness of the offence with the fact that the applicant had cooperated with the investigation and that no extraordinary circumstances were demonstrated to justify denial of bail. Treatment of competing arguments: The Department's argument that the applicant's conduct disentitled him to bail was rejected due to lack of evidence of evasion or tampering. The Court partially agreed that maximum punishment is a relevant factor but not the sole criterion. Conclusion: The applicant is entitled to anticipatory bail subject to conditions, as no extraordinary circumstances exist to deny relief. Issue 3: Applicant's conduct during investigation and its impact on bail entitlement Relevant legal framework and precedents: The Court examined the applicant's cooperation in light of the principles that cooperation and non-abscondence weigh in favor of bail. Precedents such as Rajnandini Metal Ltd. v. Union of India and others were cited emphasizing cooperation as a mitigating factor. Court's interpretation and reasoning: The applicant appeared before the investigating officers, answered questions truthfully, and did not attempt to evade investigation. The Department's claim that the applicant ignored summons was contradicted by the record showing his appearance and statement recording. Key evidence and findings: The applicant's statement dated 15.02.2025, and absence of any adverse remarks about his veracity or conduct by the Department. Application of law to facts: The Court found that the applicant's conduct was consistent with a law-abiding citizen cooperating with investigation, reducing the risk of fleeing or tampering with evidence. Treatment of competing arguments: The Department's assertion of evasion was rejected due to lack of material support. Conclusion: The applicant's conduct favors grant of anticipatory bail. Issue 4: Conditions to be imposed on grant of anticipatory bail Relevant legal framework and precedents: The Court invoked its inherent powers under Section 482 CrPC and CGST Act provisions to impose reasonable conditions to ensure investigation integrity and prevent misuse of bail. Court's interpretation and reasoning: To balance the interests of justice and investigation, the Court imposed conditions including appearance before investigating officer as directed, prohibition on leaving the country without prior permission, prohibition on tampering with evidence, and preservation of mobile data for six months. Key evidence and findings: The nature of the offence and the documentary evidence necessitated safeguarding evidence and ensuring applicant's availability. Application of law to facts: Conditions were tailored to address the specific risks identified in the case. Treatment of competing arguments: No objections were raised against the conditions; they were deemed reasonable and necessary. Conclusion: Bail was granted subject to furnishing bond and compliance with specified conditions. 3. SIGNIFICANT HOLDINGS The Court held that anticipatory bail applications are maintainable at the summons stage of investigation and that cooperation with investigation weighs heavily in favor of bail. It was observed that:
The Court concluded that the applicant is entitled to anticipatory bail subject to furnishing a bail bond of Rs. 2,00,000/- with one surety of like amount who shall be a blood relation, and compliance with the following conditions:
The Court clarified that the order does not express any opinion on the merits of the case and that the decision on arrest remains subject to the Department's conclusion under Section 69 of the CGST Act.
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