GST: High Court denies bail to accused involved in passing Fake ITC of Rs. 1,032 Crores:

GST: High Court denies bail to accused involved in passing Fake ITC of Rs. 1,032 Crores In the matter of Ashutosh Garg Vs Union of India; Rajasthan High Court (S.B. Criminal Miscellaneous Bail Application No. 548/2024 dated 06.03.2024) has denied bail to the accused who was allegedly involved in passing the Fake Input Tax Credit (ITC) of Rs. 1,032 Crores and Causing the loss of GST to the Government. The Single Bench of Justice Anoop Kumar Dhand said that "The economic offence, having deep rooted conspiracies and involving huge loss of public exchequer, needs to be viewed seriously and considered as grave offence, affecting the economy of the Nation as a whole and thereby posing serious threat to the financial health of the Country. Economic offence is always committed by a person with calculated design profiting himself regardless of the consequences to the community." He added that "The anti-social activities of persons of the upper strata in their occupations, which have become known as “white-collar crimes”, have been given their due importance in the recent past years, after enactment of the CGST Act, 2017. The object of this Act is to make a provision for levy and collection of tax on intra- State supply of goods or services or both by the Central Government and for matters connected therewith or incidental" He further added that "During last few decades, our Country has seen the execution of various plannings involving huge expenditure by the Government for various nation building activities. The corrupt officers, businessmen and contractors never had been so good in making their true contribution in the development works of the nation. No doubt the country did make some progress but a big chunk of money earmarked for developmental projects has been pocketed by the “white-collar criminals” by doing such illegal activities of causing huge loss to our Country in crores of rupees."

Order of Court:

12. This Court finds no substance in the arguments of the counsel for the petitioner that the petitioner is entitled to get bail merely because the alleged offence under Section 132 of the CGST Act, 2017 is punishable with an imprisonment of five years and the same is triable by the Court of Magistrate First Class. There cannot be any straight jacket formula to decide the bail applications in favour to the accused merely because the alleged offence is triable by the Court of Judicial Magistrate First Class and the same is punishable with an imprisonment of five years only. Every bail application is required to be decided on its own facts and circumstances and the merits of the case. Every case has different facts and allegations and while deciding the bail applications, the Court has to keep the nature of evidence and accusation in mind and then decide the bail applications accordingly. Hon’ble Apex Court in the case of Nimmagadda Prasad vs. Central Bureau of Investigation reported in 2013(7) SCC 466 has held in para 24 as under:-

“24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.”

13. Considering the facts and circumstances of the case, the nature of allegations levelled against the petitioner and evidence collected by DGGI, seriousness of the offence and further considering the fact that the bail application of the similarly placed accused Anil Kumar has been rejected by the Co-ordinate Bench of this Court, this Court is not inclined to release the petitioner on bail. 14. Accordingly, this bail application deserves to be rejected and the same is hereby rejected. 15. The trial Court is expected to expedite the trial. 16. Before parting with the order, it is made clear that whatever has been observed by this Court is only for the purpose of deciding this bail application. The Trial Court would decide the matter independently, on the basis of the evidence available on the record, without being influenced by any of the observations made by this Court.