Amit Kumar vs. Union Of INDIA

Held

The Court rejected the petitioner's prayer for bail. It held that economic offenses constitute a distinct category requiring a different approach in bail matters, as they have deep-rooted conspiracies, involve substantial loss of public funds, and pose a serious threat to the country's financial health, as per the Supreme Court's decision in Y.S. Jagan Mohan Reddy. The Court found that the complaint alleged an economic offense of significant magnitude, necessitating a thorough and detailed investigation. Considering the voluminous incriminating materials collected regarding manipulation of invoices and alleged tax evasion of Rs. 28,97,85,917/- through illegal ITC, the Court concluded that enlarging the petitioner on bail at this stage was likely to hamper the investigation and tamper with evidence. The Court also noted that the investigation involved examining a large number of documents at various levels and locations, requiring sufficient time for the investigating agency.

Facts

The petitioner, Amit Kumar, sought bail in connection with GST Case No. CGST/DGGI/GST/1928/2021, under Section 132 of the Central Goods and Service Act, 2017. The allegations are that the petitioner, operating under the trade name M/s Maruti Traders, generated invoices without actual supply of goods, fraudulently availed and passed on Input Tax Credit (ITC) through fake GST invoices and E-way bills. His declared principal place of business was found to be vague and fictitious. Incriminating documents, including E-way bills, invoices, and bank cheque books, were seized from undeclared premises. The petitioner had been in custody for one month. The revenue objected to the bail, citing ongoing investigation, a huge economic offense involving tax evasion of Rs. 28,97,85,917/- through irregular ITC, and preparation of fake invoices without actual supply.

Key Issues

1. Whether the petitioner is entitled to bail under Section 439 of the Cr.PC. given the allegations of economic offense under Section 132 of the CGST Act, 2017? The petitioner argued that there were no specific allegations against him for an offense under Section 132(1) of the CGST Act, and the only accusation was falsifying accounts. He also contended that his further detention was unnecessary as he had been in custody for a month. The revenue, represented by the Standing Counsel, GST, objected to the bail. It argued that the investigation was ongoing and crucial clues had been gathered, necessitating further detailed inquiry. The revenue emphasized that this was a significant economic offense involving tax evasion of Rs. 28,97,85,917/- through irregular ITC, preparation of fake invoices without goods supply, and evasion of tax, falling under Section 132(1)(b) & (c), punishable under Section 132(1)(i) of the Act. The revenue also presented evidence of discrepancies in E-way bill data, suggesting fraudulent movement of goods.