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TMI Blog2025 (6) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... Intelligence and Preventive Unit, Ludhiana under Section 132 (1) (b) and 132 (1) (C) of the Central Goods & Service Tax Act, 2017 (for short 'CGST Act'). 3. As per the allegations in the complaint, on receipt of an information to the effect that one firm namely M/s Monga Brothers Unit-II, situated at Budhewal Road, Ludhiana, was running a racket of issuing fake invoices in the name of other firms and had made inward supplies to the tune of Rs. 70 crores (approx.) in the financial year 2023-24 and Rs. 93 crores (approx.) in the financial year 2024-25 and had claimed Input Tax Credit (for short 'ITC') to the tune of Rs. 29.50 crores, investigation was initiated. Inspection, search and seizure proceedings under the provisions of Punjab Goods and Services Tax Act, 2017 (for short 'PGST Act') were initiated and search was conducted on 22.11.2024 in order to ascertain the genuineness of the abovenamed firm and its businesses. It was revealed that a web of fictitious businesses was used to conduct fraudulent transactions to create, avail and forward ingenuine ITC by issuing invoices without supply of goods, thereby evading payment of taxes and causing loss to government's revenue. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falsely implicated in this case without taking into account the documents on record, status of the supplier firms as available on GST portal and balance sheet of the firms. Their firm is a genuine manufacturer. They have not received any amount in their accounts as kick back for availing inadmissible ITC. The transactions conducted during routine sale and purchase are duly recorded in books of accounts. They are in custody since 13.12.2024. Conclusion of trial would take considerable time. The subject offences are triable by Magistrate. They do not have any criminal antecedents. They have permanent places of business. The case rests upon the documentary and electronic evidence and there are no chances of their tampering with the same. The maximum punishment to be awarded to them in case of conviction is 05 years. They are ready to abide by the terms and conditions to be imposed upon them by this Court for grant of bail. It is, therefore, urged that the petitions deserve to be allowed and the petitioners deserve to be released on bail. In support of their arguments, learned counsel for the petitioners have relied upon the authorities cited as Ratnambar Kaushik vs. Union of India, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s input tax credit using such invoice or bill referred to in clause (b); shall be punishable-- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine. (ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine; (iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine; 9. A bare perusal of the above mentioned provision leaves no room to doubt that the offences alleged carry minimum punishment of 06 months and a maximum punishment of 05 years of imprisonment. Further, Section 138 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against them were serious involving deep rooted planning, causing huge loss to the State exchequer and that there was possibility of the accused persons tampering with the evidence. The Hon'ble Supreme Court observed as under : "The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required. XXXX XXX 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant of bail. 14. Reference may now be made to the citations relied upon by the petitioners in support of their prayer for grant of bail. In Ratnambar Kaushik's case (supra), the High Court had dismissed an application filed by the accused for grant of regular bail in the proceedings for the offences alleged against him under Sections 132 (1) read with Section 132 (5) of the CGST Act. While observing that the alleged evasion of tax by the accused was to the extent as provided under Section 132 (1) (i) and the punishment provided was imprisonment which might extend to 05 years and fine, the fact that the accused had already undergone incarceration for 04 months and completion of trial was likely to take time and further that the evidence to be tendered was of documentary nature, the Hon'ble Supreme Court had passed an order for release of the accused on bail. In Ashutosh Garg's case (supra), the High Court of Judicature for Rajasthan at Jaipur had dismissed the prayer made by the petitioner, who was accused of creating and operating 294 fake firms and evaded tax liability of Rs.1032 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by causing loss to the govt. exchequer through fraudulent GST input tax credit claims. However, the claims are yet to be determined by the competent authority of the respondent by making proper assessment/adjudication. As such, it is only after assessment/adjudication that the liability of the petitioners with regard to exact amount of evasion of tax is to be determined under the relevant provisions of CGST Act. A complaint has already been filed against the petitioners. They are in custody since 13.12.2024. Nothing has been shown to this Court which may justify the further detention of the petitioners in prison. 18. On consideration of the above discussed facts and circumstances and also considering that the alleged offences are punishable with maximum punishment up to 05 years and also keeping in view that in such circumstances, the further detention of the petitioners may not at all be justified since in case of this nature, the evidence to be rendered by the respondent would essentially be documentary and electronic, which will be through official witnesses, due to which, there cannot be any apprehension of tampering, intimidating or influencing the witnesses and further as it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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