Rajasthan High Court Denies Bail in Rs. 1032 Cr inadmissible GST ITC Availment, says Economic Offences need Different Approach [Read Order]

"A common man of this Country is paying all kinds of taxes including CGST and SGST to the Central and State Government for development and building of the Nation and the State but the person like the petitioner is causing obstruction in the development of the Nation as well as the State by creating fake firms and causing huge loss of Rs.10,32,91,88,876/- to public exchequer.” Rajasthan HC Rejecting the bail plea of the petitioner, A Single Bench of Rajasthan High Court held that, “the Court has to keep the nature of evidence and accusation in mind and then decide the bail applications accordingly”. Counsel for the petitioner submitted that the petitioner has been impleaded as accused in the instant case on the basis of his confessional statement recorded under Section 70 of the Goods and Services Tax Act, 2017. Prateek Kasliwal with Shubham Bhati and Mausi Dhadhich further submitted that the aforesaid statement of the petitioner is not admissible in evidence, at this stage, as the same is not relevant, as there was no adjudication of the allegations on merit in view of Section 136 of the CGST Act, 2017. It was also added that the petitioner has been arrested in the instant case on 02.11.2023 and after his arrest, complaint has been filed against him for the offences punishable under Section 132(1)(b)(c)(f)(j)(l) of the Central Goods and Services Tax Act, 2017 on 30.12.2023. The Counsel argued that the maximum punishment for the above alleged offence is five years and the same is triable by the Court of Magistrate (First Class). Counsel submits that looking to the period of incarceration of the petitioner and looking to the fact that the alleged offence is triable by Court of Magistrate, indulgence of bail be granted to the petitioner. On the other hand, Kinshuk Jain with Saurabh Jain, Counsel for the Union of India opposed the arguments raised by the counsel for the petitioner and submitted that when the statements of the petitioner were recorded under Section 70 of the CGST Act, 2017, it was revealed that the petitioner has created and operated 294 fake firms and has evaded a tax of Rs. 1,032 Crores. It was further submitted that when the investigation was conducted by the investigating agency, this fact came on the record that one co-accused Anil Kumar was also in conspiracy with the petitioner and that the Coordinate Bench of the Rajasthan High Court has already rejected the bail application of the co-accused Anil Kumar. The Bench observed that, “The economic offence, having deep rooted conspiracies and involving huge loss of public exchequer, needs to be viewed seriously and considered as grave offence, affecting the economy of the Nation as a whole and thereby posing serious threat to the financial health of the Country. Economic offence is always committed by a person with calculated design profiting himself regardless of the consequences to the community.” The Rajasthan High Court bench further observed that, “The anti-social activities of persons of the upper strata in their occupations, which have become known as “white-collar crimes”, have been given their due importance in the recent past years, after enactment of the CGST Act, 2017. The object of this Act is to make a provision for levy and collection of tax on intra State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.” Thus, the Single Bench of Justice Anoop Kumar Dhand held that, “Considering the facts and circumstances of the case, the nature of allegations levelled against the petitioner and evidence collected by DGGI, seriousness of the offence and further considering the fact that the bail application of the similarly placed accused Anil Kumar has been rejected by the Coordinate Bench of this Court, this Court is not inclined to release the petitioner on bail. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates