Balwinder Singh vs. State Tax Officer

Held

The Court granted regular bail to the petitioner. While acknowledging the seriousness of the allegations and the substantial amount of tax evasion, the Court noted that the petitioner had been in custody since February 9, 2021, and the trial was likely to take time. The Court distinguished the Supreme Court's decision in Nimmagadda Prasad's case, stating it was not applicable because, unlike that case, the investigation concerning the petitioner had been completed and challan presented. The Court found no useful purpose would be served by keeping the petitioner behind bars. The petitioner was ordered to furnish personal/surety bonds amounting to Rs. 5 lakh and surrender his passport, with a condition not to leave India without prior court permission. The Court explicitly stated that its observations were not an expression on the merits of the case.

Facts

The petitioner, Balwinder Singh, sought regular bail in a complaint case registered under Sections 69, 132(1)(a), (b), and (c) of the Punjab Goods and Service Tax Act, 2017. The allegations were that the petitioner, along with co-accused, engaged in tax evasion by flouting bogus firms and showing fake billings and transactions to draw GST refunds, causing a loss of Rs. 8.95 crore to the State Government. The petitioner claimed he was falsely implicated, stating the email and phone number updated with the respondent-department did not belong to him. He admitted to opening a firm, M/s Suvidha Enterprises, and obtaining a GST number, but alleged it was used by Prince Dhiman, his adopted nephew, who handled all business transactions without the petitioner's knowledge. The petitioner had been in custody for over 10 months. The case involved documentary evidence, and a co-accused, Prince Dhiman, was still at large.

Key Issues

1. Whether the petitioner is entitled to regular bail in light of the alleged tax evasion of Rs. 8.95 crore through bogus firms and fake billings under Sections 69 and 132(1)(a), (b), and (c) of the Punjab Goods and Service Tax Act, 2017? The petitioner argued that he was falsely implicated, that the contact details with the department were not his, and that his firm was used by his nephew, Prince Dhiman, who managed all transactions. He contended that he had no role in the alleged offenses and had been in custody for over 10 months, making him not required for investigation. He also raised a challenge to the vires of Sections 69 and 132 of the CGST Act in a separate writ petition and argued that his arrest was without jurisdiction. He further submitted that the case relied on documentary evidence and that his continued custody would serve no useful purpose, citing various bail orders in similar cases. The respondent-State argued that the petitioner and co-accused caused a significant loss to the government through tax evasion and bogus bills via firms under their control. They asserted a nexus with over 30 other firms across multiple states, linked by common email and phone numbers to the petitioner and Prince Dhiman. The State highlighted that Prince Dhiman was still at large and that the offense was committed with deliberate design for personal profit. They contended that the allegations were serious and that releasing the petitioner on bail could lead to tampering with evidence, relying on a Supreme Court judgment.