Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(All) 2022

IN THE HIGH COURT OF ALLAHABAD
PIYUSH AGRAWAL, J.
Qamar Ahmed Kazmi - Applicant
Versus
State of U.P. - Opposite Party
CRIMINAL MISC. BAIL APPLICATION NO. 2329 OF 2024.
Decided On : 01-03-2024

Advocates appeared:
For the Applicant :Mr. Anoop Trivedi, Sr. Advocate and Mr. Ankit Shukla.
For the Opposite Party : G.A., Mr. Manish Goel, A.A.G. and Mr. Nitesh Kumar Srivastava.

The seriousness of economic offences does not alone justify bail denial; factors like trial delay and personal circumstances must also be considered.

Headnote:(A) Indian Penal Code, 1860 - Sections 419, 420, 467, 468, 471 & 120B - Bail application - Applicant accused of availing excess input tax credit through forged documents and non-existent firms - Prosecution alleges fraudulent activities without actual movement of goods - Applicant claims innocence, asserts compliance with GST regulations, and pending adjudication - Court considers the delay in trial and applicant's health condition. (Paras 2-26)

(B) Bail - Considerations for granting bail in economic offences - Seriousness of the offence not sole determinant; delay in trial and personal circumstances also relevant. (Paras 22-25)

Facts of the case:
The applicant is accused of fraudulently claiming input tax credit exceeding Rs. 4 crores through fictitious transactions with non-existent firms, leading to cancellation of e-way bills. The applicant contends that all transactions were legitimate and that no adverse action has been taken against the selling firms.

Findings of Court:
The court finds that the applicant has been in custody since December 2023, and the trial is expected to take considerable time, warranting bail.

Issues: The main issues include the legitimacy of the input tax credit claims and the applicant's health condition.

Ratio Decidendi: The court ruled that the seriousness of the offence alone does not justify denial of bail, especially considering the delay in trial and the applicant's health.

Result: Bail application allowed.

JUDGMENT

Piyush Agrawal, J.

Heard Shri Anoop Trivedi, learned Senior Advocate, assisted by Shri Ankit Shukla, learned counsel for the applicant and Shri Manish Goel, learned Additional Advocate General, assisted by Shri Nitesh Kumar Srivastava, for the State - opposite party.

2. The instant bail application has been filed on behalf of the applicant in Case Crime No. 394/2023, under Sections 419, 420, 467, 468 471 & 120B IPC, Police Station - Civil Lines, District - Meerut with the prayer to release him on bail during pendency of trial.

3. The prosecution story as set up in the FIR filed by the Incharge Inspector, Special Task Force (S.T.F.) is that the applicant has availed the input tax credit of more than Rs. 4,28,37,362/- for the period of 2017-18 to 2022-23 without actual movement of goods on the basis of forged and fictitious documents of supplies were procured from various non-existing firms i.e. Santosh Enterprises, Sandip Metal, Honey Metal and Rajpal & sons. Further after implementation of e-way bill system on the portal from the year 2018-19 till the month of May, 2023, e-way bills worth Rs. 17,33,83,966 have been cancelled by the applicant's firm without any valid reasons or reasonable explanation. It has been further averred that on verification of all those selling firms, either the firms were found non-existing or have not doing any business. It has been further averred that the details of the trucks which were used for transportation of goods, have not been found in toll plazas situated on the alleged rout of transportation.

4. Mr. Anoop Trivedi, learned Senior Counsel for the applicant submits that the applicant is innocent and has been falsely implicated in the present crime. He further submitted that the applicant is a proprietor of a registered firm which has been duly registered under the GST Act and registration is still valid and same has not been cancelled so far. He further submitted that all purchases have been made from registered parties such as M/s Santosh Enterprises, Sandip Metal, Honey Metal and Rajpal & sons, after checking their credentials from the G.S.T. portal. All the aforesaid firms were found duly registered under the G.S.T. Act and there was no red-flag against the them as such in the normal course of business, the purchases were made on genuine tax invoices and admissible G.S.T. was deposited by the concerned parties. It is not in dispute that to the best of knowledge, the registration of selling dealers has neither been cancelled at the time of transaction nor till date i.e selling dealer are still duly registered under the G.S.T. Act. He further stated that specific pleadings have been made in this respect in paragraph nos. 11 to 20 of this bail application and same has not specifically been denied in the counter affidavit filed by the State.

5. Mr. Trivedi further submitted that survey was conducted at the business premises of the applicant on 12.6.2023 in which no discriminating material was found against the firm of the applicant; however, some shortcomings were found which were duly explained and requisite tax thereof was accordingly deposited. He further submitted that thereafter notice dated 3.1.2024 was issued under Section 74 of the Act of which detailed reply was submitted.

6. Mr. Trivedi further submitted that adjudication proceeding is still pending and no authority as contemplated under the GST Act has passed any quantification order for quantifying the excess claim of input tax credit or any order has been passed reversing the claim of input tax credit.

7. Mr. Trivedi has further averred that GST Act is a complete Code itself; the Act further contemplates all situation to be taken care of. He submitted that in the event, the G.S.T. Commissioner has reason to believe that any registered person has committed any offence or wrongly claim any input tax credit and retain any benefits in violation of the provisions of the Act or with intention to evade the tax or issue any invoic