Denial of Bail can’t be used as an indirect method to punish accused before Conviction: Orissa HC grants Bail to person accused of availing bogus ITC worth Rs. 20.45 cr [Read Order]

The Orissa High Court has granted the bail to the  person accused of availing bogus ITC worth Rs. 20.45 crores and held that denial of bail cannot be used as an indirect method to punish accused before conviction.

The Petitioners, Smruti Ranjan Mohanty alongwith other accused, were involved in the creation and operation of 12 fictitious/ bogus firms in the name of unconnected persons by misutilization their identity proof. The same was done behind their back, in order to avail and utilise bogus input tax credit of an amount of Rs. 20.45 crores on the strength of fraudulent purchase invoices without any physical receipt or actual purchase of goods. As such both of them are alleged to be part of a collusion to evade taxes to the tune of approximately Rs. 42.00 crores and therefore are liable for the payment of the same under Section 132 of the OGST Act, 2017.

The prosecution’s case is that both the Petitioners along with other accused, were involved in the creation and operation of 12 fictitious/ bogus firms in the name of unconnected persons by misutilization their identity proof. The same was done behind their back, in order to avail and utilise bogus input tax credit of an amount of Rs. 20.45 crores on the strength of fraudulent purchase invoices without any physical receipt or actual purchase of goods. As such both of them are alleged to be part of a collusion to evade taxes to the tune of approximately Rs. 42.00 crores and therefore are liable for the payment of the same under Section 132 of the OGST Act, 2017.

The single bench of Justice S.K. Panigrahi has held that both the bread earning sons of a family have been in custody for over a year now, the court did not find any justification for detaining the Petitioners in custody for any longer. As a side note it observed that more and more such cases are brought to the fore where the mere pawns who have been used as a part of larger conspiracy of tax fraud have been brought under the dragnet by the prosecution. It is perhaps time that the prosecution will do well to follow the trail upstream and bring the “upstream” parties who are the ultimate beneficiaries who are the gainers in these evil machinations.

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