Back
RAJASTHAN HIGH COURT BENCH AT JAIPUR
Prakash Gupta, J.
Sanjeev Jain - Appellant
Versus
Union of India - Respondent
Criminal Miscellaneous Bail Application No. 3608 of 2021, 3981 of 2021
Decided On : 31-05-2021
Bail - Criminal Procedure - Section 439 CrPC, Section 132, 134, 137, 138 of the Central Goods and Services Tax Act, 2017 - The court analyzed the provisions regarding bail eligibility, the nature of the alleged economic offences, and the implications of the accused's roles in the company, ultimately granting bail based on the circumstances of the case.
Fact of the Case:
The petitioners were arrested for alleged tax evasion involving fake invoices and wrongful input tax credit. They filed bail applications after their initial requests were denied, arguing that the charges were bailable and that they were falsely implicated as employees rather than directors.
Finding of the Court:
The court found that the petitioners had been in custody for an extended period, the investigation was complete, and the maximum punishment for the alleged offences was five years, which supported their eligibility for bail.
Issues: Whether the petitioners are entitled to bail under the circumstances of their arrest for economic offences and the nature of the charges against them.
Ratio Decidendi: The court emphasized that economic offences require careful consideration for bail, but given the completion of the investigation, the lack of criminal antecedents, and the age of the petitioners, bail was warranted.
Result: The bail applications were allowed, and the petitioners were granted bail under Section 439 CrPC.
JUDGMENT
Prakash Gupta, J. - These two bail applications have been filed by the petitioners under Section 439 CrPC.
2. Facts of the case are that a letter dated 27.11.2020 was received from the Assistant Commissioner, CGST Division-C, Bhiwadi to the effect that income tax credit (for short, 'ITC') on the invoices issued by M/s. Veto Merchandise had been wrongly availed. Alongwith the aforementioned letter, a letter written by the Deputy Commissioner, Circle-I, State Tax, Jaipur dated 3.3.2020 was also enclosed, wherein it was stated that upon verification of M/s. Veto Merchandise, Jaipur (GSTIN- 08AA0FV2648B1Z1), the said firm was found non-existent at its principal place of business and, therefore, the invoices issued by M/s. Veto Merchandise, Jaipur (GSTIN-08AA0FV2648B1Z1) to M/s. Swissline Intertrade Pvt. Ltd. F-438, Phase-1, Ind. Area, Bhiwadi (GSTIN-08AAJCS6595A1Z3) were also fake / bogus. The Dy. Commissioner, State Tax had also informed that no business activities were done at the business premises of M/s. Veto Merchandise and that the registration of the said firm had been cancelled and complete ITC had been blocked.
3. Returns and other relevant details of M/s. Swissline Intertrade Pvt. Ltd. F-438, Phase-1, Ind. Area, Bhiwadi (GSTIN-08AAJCS6595A1Z3) were checked on AIO and it was found that earlier M/s. Swissline Intertrade Pvt. Ltd. F-438, Phase-1, Ind. Area, Bhiwadi (GSTIN-08AAJCS6595A1Z3) was registered under Central Excise and later, it was registered under the GST regime. Since July, 2017 (after enactment of GST), M/s. Swissline had filed GSTR 3B returns upto February, 2020 and the total taxable supplies shown in GSTR 3B returns were Rs. 300.09 crores. M/s. Swissline Intertrade Pvt. Ltd. had paid tax amounting Rs. 48.87 crores through ITC and Rs. 2.20 lakhs only through cash. It had also paid cash Rs. 4.71 lakhs under RCM. The cash : ITC ratio of M/s. Swissline Intertrade Pvt. Ltd. is 0.04 : 99.96.
4. From registration details of M/s. Swissline Intertrade Pvt. Ltd. F-438, Phase-1, Ind. Area, Bhiwadi (GSTIN- 08AAJCS6595A1Z3), it was gathered that GST registration of the company was cancelled on 5.2.2020 and it had three Directors:
ii. Sh. Ramesh Kumar Jain, S/o Shri Bhimsem Jain, Resident of ZP-21, Maurya Enclave, Block-ZP, Maurya Enclave, Pitampura Delhi iii. Smt. Saroj Bala D/o Abhey Kumar Jain, Resident of DP-218, Maurya Enclave, Block-DP, Maurya Enclave, Pitampura, Delhi.
5. Similarly, Sanjeev Jain S/o Ramesh Jain was alleged to be Director of another firm called M/s. Mohit Metals Pvt. Ltd., G-1208 B & C, RIICO Industrial Area, Rampur Mundana, Bhiwadi, Alwar, Rajasthan (08AAECM0087C1ZR) and he also held 65% shares of the company. Petitioner Ramesh Jain was alleged to have availed of wrongful input tax credit to the tune of Rs. 47,91,05,784/- and passed on fake / bogus ITC to the tune of Rs. 48,40,60,293/- without any purchase or sale of goods. Likewise, petitioner Sanjeev Jain was alleged to have availed of wrongful input tax credit to the tune of Rs. 13,35,44,893/- and passed on fake / bogus ITC amounting to Rs. 12,64,19,263/- without any purchase or sale of goods.
6. Acting upon the aforementioned letters, a complaint was filed against them before ACJM (Economic Offence), Jaipur and they were arrested on 19.12.2020. The petitioners filed bail applications before the trial court, which came to be dismissed vide order dated 8.2.2021/20.2.2021. Hence, these bail applications.
7. Mr. Sameer Jain, learned counsel for the petitioners submits that as per Section 134 of the Central Goods and Services Tax Act, 2017 (for short, 'the Act of 2017'), the alleged offence is triable by a Judicial Magistrate, First Class. He further submits that as per arrest memo (Annexure-1), the petitioners have been arrested for the offence under clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) o
The main legal point established in the judgment is that the court may grant bail considering factors such as the length of custody, maximum punishment, completion of investigation, and absence of cr....
The court established that economic offences, while serious, do not preclude bail if the investigation is complete and the accused have no prior criminal history.
The main legal point established is the importance of procedural compliance in arrest procedures and the need for substantiated allegations in cases of wrongful input tax credit availing.
Any offence under this Act may, either before or after institution of prosecution, be compounded by Commissioner on payment, by person accused of the offence, to Central Government or State Governmen....
Bail is the rule and denial is the exception; economic offences require careful consideration of evidence and the nature of accusations.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
