IMPORTANT POINT
The court ruled that economic offences require a stringent approach in bail matters, emphasizing the gravity of allegations and evidence against the accused.

ORDER :

1. The matter comes upon for hearing on the application for cancellation of bail filed under Section 439(2) of Cr.P.C. as the Hon’ble Apex Court in Criminal Appeal No.316/2024 (arising out of SLP (Crl) No.10864/2024), directed this Court to provide reasonable opportunity to both the parties for advancing their arguments on the application filed under Section 439 (2) of the Cr.P.C.. The Hon’ble Apex Court also directed the counsel for the respondent to present on the next date and not to procrastinate the matter again. The matter was listed and heard on 26.11.2024.

2. The petitioner-Union of India has filed the present Criminal Misc. Cancellation Bail Application under Section 439 (2) of Cr.P.C., against the order dated 03.11.2023, passed by the learned Additional Sessions Judge No.2, Jaipur Metropolitan-II, whereby the Bail Application No.179/2022 under Section 132 (1) (c) and (f) of Central Goods and Services Tax Act, 2017 (from now on referred to as ‘CGST Act’) was allowed.

3. It is vehemently argued by learned counsel for the petitioner that the court below committed an error while granting bail to the present respondent-Gautam Garg. The learned Court below has observed that the statement of respondent-Gautam Garg was not recorded under normal circumstances; there was no evidence that Gautam Garg is a Manager in Firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai & Sons and M/s Gurbax Rai Praveen Kumar. No electronic evidence was found on the residential premises of Gautam Garg; the department could not produce the reasons for believing in the arrest memo of Gautam Garg. The State Goods and Services Tax Department of Rajasthan has issued a summons to Gautam Garg. Two proceedings cannot run simultaneously. Lastly, the evasion of Goods and Services Tax (from now on referred to as ‘GST’) is only Rs.7.48 crores. After relying upon the judgment of Hon’ble Allahabad High Court, the Court below allowed the bail application of Gautam Garg.

4. Learned counsel for the petitioner further submits that the above observations in the bail application are contrary to facts. Learned counsel for the petitioner submits that respondent Gautam Garg, in his statement recorded under Section 70 of the CGST Act, has clearly stated that he and his uncle Lovkesh Kumar collected fake bills from fake and non-existent firms based in Sirsa Haryana without supplying any goods for the three companies namely; M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar. The facts also disclose that in a search conducted by the Department, Rs.4.00 lacs were found in the residence of respondent Gautam Garg.

5. Apart from the evidence of petitioner under Section 70 of the CGST Act, pre-signed chequebooks, weighbridge receipts, details of jeans brokers, purchase invoices and raw slips related to the firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar were also recovered from the residence of Gautam Garg and Lovkesh Kumar. Further, two WhatsApp groups were found on the mobile of Gautam Garg, in which Gautam Garg and Lovkesh Kumar were members, and evidence of GST evasion by the said firms was found in the said WhatsApp group. The search was conducted under Section 67(2) of CGST Act.

6. Further, Gautam Garg in his statement, has also stated that recovered cash is related to the business activity of M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar. The respondent also made available the cash books to the said firms. In the statement, respondent Gautam Garg has also stated that firms, namely M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar did not receive any goods, and only the bills received from the firms are from the fake firms. In the search operation, many documents and electronic evidence related to the firms were found in Gautam Garg’s residence and mobile phone. Learned counsel further submits that as per