Failure of Investigating Agency to Produce pre-charge Evidence: P & H HC grants Bail to GST Evasion Accused [Read Order]

The Punjab and Haryana High Court granted bail to the accused who was charged with Goods and Service Tax (GST) evasion, as the investigating agency failed to produce any pre-charge evidence.

In the instant case, the petitioner Rajan Arora was accused of contravening the provision of Section 132(1)(a)(b)(c) of Punjab Goods and Services Tax (PGST) Act, 2017 and tax evasion. The petitioner was accused of supplying goods without issuing invoice and wrongfully availing input tax credit. The petitioner was alleged of evading tax by creating a network of around 16 firms which dealt with steel and iron trading and supplied manufacturing items which were controlled and owned by the petitioner.

H.S. Brar, who appeared for the petitioner, submitted that the investigation had already concluded and petitioner had been in custody since 09.03.2022 and determination of evasion in terms of Section 74 of the Goods and Services Tax Act, 2017 was not done. It was also contended that the prosecution could not produce any evidence prior to framing of charges.

Gupta, who appeared for the prosecution opposed the bail petition contending that a serious allegation of creating 16 fake firms to evade tax had been imposed upon the accused.

The Single Bench of Punjab and Haryana High Court of Justice Pankaj Jain allowed the petition and granted bail with certain conditions on the ground that no pre-charge evidence had been produced by the prosecution for 6 months, which was a more relevant ground than non-issuance of show cause notice for adjudication of the evaded tax under Section 74 of the Goods and Services Tax Act, 2017.

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