Bail granted by Rajasthan High Court to the petitioners who are already in jail for 450 days for offences under GST subject to certain conditions.

MOHIT VIJAY AND KAPIL VIJAY vs. UNION OF INDIA

Arguments by Petitioner

Learned counsel for the petitioner submits that the co-accused petitioners were arrested on 1st March, 2019 for offence under Sections 132(1)(b)(c)(f)(j) and (i) of the Central Goods and Services Tax Act, 2017. Learned counsel submits that the allegation against the petitioners is of having issued invoices giving benefit to companies who availed benefit of of ITC (Input Tax Credit). A list of the said companies have been mentioned in the complaint which are 36 in number. However, no action has been taken as against the concerned persons of the said companies. Learned counsel submits that no further investigation is required to be conducted as against the accused petitioners and they are in judicial custody since long. Learned counsel submits that under the CGST Act, the case is compoundable and maximum punishment which can be awarded is only five years. The petitioners have already remained in jail for the last 450 days. Learned counsel also submits that in the reply filed by the respondents, it has been stated that they are conducting an investigation against more than 1300 beneficiaries, which is likely to take long time. Learned counsel further submits that in view of the COVID- 19 Pandemic, the petitioners be released on bail with certain conditions.

Learned counsel relies on the judgment in the case of Sanjay Chandra Vs. Central Bureau of Investigation reported in 2012 (1) SCC 40 as well as the order passed by the Coordinate Bench at Principal Seat at Jodhpur in the case of Gaurav Maheshwari Vs. State(S.B.Criminal Misc.IInd Bail Application No.1825/2020) decided on 11.5.2020 and Gaurav Maheshwari Vs. State (S.B.Criminal Misc.Bail Application No.1422/2020) decided on 13.5.2020 submits that the petitioner may be given the similar benefit and similar conditions may be laid down, which the petitioners will abide.

Arguments by Revenue

Learned counsel appearing for the Revenue strongly opposes the bail application and submits that the petitioners have committed a huge economic offence and huge amount of CGST has been evaded resulting a huge loss of revenue since fraudulent and forged invoices were issued in relation to 34 companies, petitioners created ghost companies which were fraudulent and created only for the purpose of issuing such invoices resulted in giving benefit to as many as 1878 customers in different 21 states. Learned counsel submits that out of the said customers, 321 customers are those who are residing outside Rajasthan.

Learned counsel submit that the Revenue Department has recovered ₹ 30 crore from such customers, who wrongly availed of the benefit of ITC. Learned counsel submits that as regards the case being registered against the said beneficiaries since the provisions is only where the benefit has been wrongfully obtained from more than 5 crore and otherwise the case is bailable. The department in the process of conducting further investigation in regard to others.

On being asked by this Court with regard to any particular investigation, which is pending as against the accused petitioners, learned counsel frankly states that there is no such investigation as against the accused petitioners, who are in judicial custody. However, he says that they are likely to cause interference in the fruther investigation and may effect the material witnesses and therefore, prays that they should not been released on bail.

Learned counsel also relies on one another judgment passed by the Coordinate Bench of this Court in relation of the Rajesh Arora Vs. State (S.B. Criminal Bail Application No.3987/2020) decided on 26th May, 2020 where the Court in the similar circumstances had refused to grant indulgence of bail to the petitioner, who was in jail since 3rd August, 2018.

Held by Court

Keeping in view that the petitioners are already in jail for 450 days and no further investigation or recovery is to be made for the purpose of the case.

I am inclined to release the petitioners on bail with conditions as laid down by the Apex Court as noted above.

Taking into consideration the overall facts and circumstances of the case, but without commenting on merits of the case, I deem it just and proper to enlarge the petitioners subject to submitting a bail bond in the sum of ₹ 1,00,000/- along with one surety of the like amount subject to the following conditions.

a. The appellants shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts or the case so as to dissuade him to disclose such facts to the Court or to any other authority.

b. They shall remain present before the Court on the dates fixed for hearing of the case. If they want to remain absent, then they shall take prior permission of the court and in case of unavoidable circumstances for remaining absent, they shall immediately give intimation to the appropriate court and also to the Superintendent, CBI and request that they may be permitted to be present through the counsel.

c. They will not dispute their identity as the accused in the case.

d. They shall surrender their passport, if any (if not already surrendered), and in case, they are not a holder of the same, they shall swear to an affidavit. If they have already surrendered before the Ld. Special Judge, CBI, that fact should also be supported by an affidavit.

e. We reserve liberty to the CBI to make an appropriate application for modification/recalling the order passed by us, if for any reason, the appellants violate any of the conditions imposed by this Court.

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