Raj Kumar Sharma S/O Late Shri Kishan Chand Sharma vs. Union Of INDIA

Held

The Court considered the submissions made by both learned counsel for the parties. While acknowledging the petitioner's arguments regarding the nature of the offence and procedural aspects, the Court also took into account the seriousness of the allegations presented by the respondent, particularly the substantial amount of input tax credit claimed without corresponding goods. The Court explicitly stated that it was not expressing any opinion on the merits of the case. However, based on the facts and circumstances, and the gravity of the alleged offence, the Court concluded that it was not a fit case to enlarge the petitioner on bail under Section 439 Cr.P.C. The reasoning hinges on the perceived seriousness of the alleged financial irregularities in claiming input tax credit, which outweighed the petitioner's arguments for bail at this stage, especially with the investigation still pending. The ratio decidendi is that in cases involving significant alleged financial fraud under the GST regime, where investigations are ongoing, bail may be denied if the alleged offence is considered serious by the court.

Facts

The petitioner, Raj Kumar Sharma, filed a bail application under Section 439 Cr.P.C. challenging an order related to File No. IV(06)115/AE/JPR/2020, initiated by the Office of the Commissioner, CGST Jaipur. The alleged offence pertains to Section 132 of the CGST Act, 2017. The petitioner claims to have been falsely implicated, is incarcerated, and argues that the offence is triable by a Magistrate, compoundable, and carries a maximum punishment of 5 years, with the trial likely to be lengthy. He also asserts that no show cause notices were issued. The respondent (Union of India/CGST) contends that the petitioner and others allegedly formed firms and claimed input tax credit (ITC) of Rs. 12.12 Crores without actual transportation of goods, with the total ITC claimed by the petitioner and co-accused amounting to thousands of Crores. The investigation is stated to be ongoing.

Key Issues

1. Whether the petitioner is entitled to be enlarged on bail under Section 439 Cr.P.C. in connection with the alleged offence under Section 132 of the CGST Act, 2017, considering the facts and circumstances of the case? Petitioner's Arguments: The petitioner argued that he has been falsely implicated, is in custody for a significant period, and the offence is triable by a Magistrate, compoundable, with a maximum punishment of 5 years. He also submitted that the trial may take a long time and that no show cause notices were issued. Therefore, he should be granted bail. Respondent's Arguments: The respondent (CGST) contended that the petitioner and others allegedly claimed substantial input tax credit (Rs. 12.12 Crores and thousands of Crores in total) without genuine supply of goods. They further argued that the investigation is still pending, and thus, the bail application should be dismissed.