A two-judge bench of the Supreme Court has recently struck down the condition to deposit 70 Lakh Rupees, in bail granted to an accused allegedly involved in a GST scam of around 7 Crore Rupees.
The bench of Supreme Court Justices Krishna Murari and B V Nagarathna observed that, “it cannot be presumed that the appellant is under a legal liability to pay the said amount.”
The petitioner, Subhash Chauhan is the Proprietor of M/s Minal Traders, Bhilai and is doing the business of Iron Trading. The applicant was arrested by the officers of the CGST on 27.10.2021 and after investigation, a complaint has been filed against the applicant on 24.12.2021 alleging that the applicant carried out purchases from different entities and wrongly availed Input Tax Credit (ITC) of Rs.6.95 Crores by procuring invoices from fake and fictitious firms.
It was also alleged that he supplied goods without payment of tax and without issuing invoices to the tune of 27.7 Lakhs Rupees. Thus, the total Input Tax Credit availed and non-payment of tax was allegedly, Rs.7.23 Crores.
It is also notable that the accused was released on bail after 9 months in jail, with the investigation yet to be concluded. It was observed by the Chhattisgarh High Court that the offence of wrongful availment of Input Tax Credit (ITC) was a compoundable and non-cognizable offence. A condition to deposit Rs. 70 Lakh was imposed while granting the bail.
The petitioner, through Himanshu Tyagi, Poonam Sharma and Moksh Tyagi, challenged the same in the Apex Court in a Criminal Appeal, contending that there was no final assessment in this regard under the Goods and Services Tax (GST) Act.
ASG K M Nataraj appearing for the Union of India/State has stated that such a condition cannot be imposed while granting bail.
The Supreme Court Bench held that the condition directing the appellant to deposit a sum of Rs. 70 Lakhs is not liable to be sustained and set aside the condition, leaving the other bail conditions intact, as per the facts and circumstances of the case.
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