GST Evasion: Madras HC grants Bail to person accused of Floating Fake Iron-Scrap Company [Read Order]

GST Evasion- Madras High Court - Bail - floating fake Iron-Scrap company - taxscan

The Madras High Court granted bail to the person accused of floating a fake Iron-Scrap company.

It has been alleged that the petitioner, M.Sampath Kumar has floated fake company Iron-Scrap dealers which included M/s.Aaliya Enterprises, M/s.Vinayaka Enterprises, M/s.A.R.Enterprises and several other units, and has issued invoices for a value of around Rs.50 Crores, involving GST of 9.70 Crore through five fake companies.

The petitioner alleged to have availed input tax credit based on fake invoices and has committed offences under Sections 132 (1)(b) and 132(1)(c) of Central Goods and Services Act, 2017, punishable under Section 132 (1)(i) of CGST Act, 2017. The petitioner is in judicial custody from October 29, 2020 for alleged offences under Sections 132(1)(b) & 132(1)(c) of the CGST Act, 2017, which is punishable under Section 132 (1) (i) of the CGST Act, 2017.

Mr.G.Natarajan, the Counsel for the petitioner contended that the petitioner was remanded into judicial custody on October 29, 2020 and the Investigating Agency did not file charge sheet within the statutory period of 90 days, and therefore, the Chief Judicial Magistrate, Coimbatore, ought to have granted bail to the petitioner under Section 167 (2) of Cr.P.C. It is to be noted that admittedly, the Principal District and Sessions Judge, Coimbatore, granted bail to the petitioner on December 14, 2020 itself with certain conditions.

However, since the petitioner could not comply with the conditions imposed by the Principal District and Sessions Judge, filed a modification petition before this Court and this Court, by an order dated February 22, 2021, refused to modify the conditions and however, granted six week times to comply the conditions imposed by the learned Principal District and Sessions Judge, Coimbatore. However, without complying with the conditions, the petitioner has taken the next available opportunity of filing a petition under Section 167 (2) of Cr.P.C., seeking mandatory bail, as the charge sheet was not filed within the statutory period of 90 days. The Chief Judicial Magistrate, on consideration of facts, held that once a person already granted bail, he cannot file a petition under Section 167 (2) of Cr.P.C. and therefore, the learned Chief Judicial Magistrate, dismissed the petition.

The single judge bench of Justice P.Velmurugan after considering the facts and circumstances of the case and also considering the quantum of alleged tax evasion and also considering the pandemic situation, gave one more opportunity and grant bail to the petitioner, on the very same conditions imposed by the Principal District Sessions Judge, Coimbatore.

Firstly, the petitioner shall produce security or bank guarantee for a sum of Rs.1.00 Crore; or the petitioner shall produce security by way of title deed or title deeds standing in the name of the petitioner or his relatives and having market value not less than Rs.1.0 Crore.

Secondly, the petitioner shall execute a bond for a sum of Rs.1,00,000/- with two sureties for a like sum to the satisfaction of the learned Chief Judicial Magistrate, Coimbatore.

Thirdly, the petitioner was directed to sign before the respondent-Police daily at 10.00 a.m., until further orders. The petitioner or his men shall not tamper the evidence.

Fourthly, the petitioner should not abscond and he should cooperate with the investigating agency as and when required.

Lastly, violation of any of the conditions imposed by this Court will result in cancellation of the bail.

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