Amit Kumar vs. State Of Punjab

Held

The Court allowed the petitions for regular bail. The Court noted that while the State contended the allegations were serious and involved significant loss, the petitioners argued that there was no evidence of generating fake invoices without GST payment, facilitating ITC without goods, or actual tax evasion. The petitioners also highlighted that the matter was of a civil nature, the liability was debatable, and the department's website showed zero liability against them. A significant point raised was the pending challenge to the vires of Sections 69 and 132 of the CGST Act. The Court distinguished the present case from an order relied upon by the State, stating that in this instance, the investigation was complete and the petitioners had been in custody since June 2020. The Court found no useful purpose in keeping the petitioners incarcerated, considering the trial would take time. Therefore, the petitioners were directed to be released on regular bail upon furnishing adequate personal/surety bonds of Rs. 10 lakhs each, surrendering their passports, and not leaving India without prior court permission. The Court explicitly stated that its observations were not an expression on the merits of the case.

Facts

The petitioners, Amit Kumar, Vishesh Kumar, Sahil Sharma @ Sahil Kumar, and Abhishek Moudgil, are seeking regular bail in a case registered under Sections 132(1)(b) and (c) of the Punjab Goods and Service Tax Act, 2017. The complaint alleges that the petitioners issued bogus bills, showing false Input Tax Credit (ITC) through firms created by them, causing a loss of approximately Rs. 8.73 crore and Rs. 7.74 crore to the government by way of tax evasion. The petitioners have been in custody since June 2020. The matter is before the High Court of Punjab and Haryana at Chandigarh.

Key Issues

1. Whether the petitioners have been falsely implicated, given the absence of allegations regarding the generation or origination of fake invoices without GST payment, or evidence of facilitating ITC without goods or its utilization for GST payment on actual supply? (Question of law and fact, concerning Section 132(1)(b) and (c) of the Punjab Goods and Service Tax Act, 2017). 2. Whether the arrest under the Punjab Goods and Service Tax Act, 2017, is without jurisdiction? (Question of law, concerning the jurisdiction of authorities under the Act). 3. Whether the petitioners are entitled to regular bail, considering their period of custody, the pendency of a challenge to the vires of Sections 69 and 132 of the CGST Act, and the fact that the investigation is complete? Petitioner's arguments: No allegation of generating fake invoices without GST payment; no evidence of facilitating ITC without goods or its utilization; no evidence of tax evasion or revenue loss; matter is civil and debatable; maximum sentence is five years; department's website shows zero liability; challenge to vires of Sections 69 and 132 of CGST Act is pending; arrest is without jurisdiction; petitioners have been in custody for over 8 months and are not required for investigation; case is based on documentary evidence; reliance on bail orders for similarly placed co-accused (Ganga Ram, Rajiv Gupta) and other cases. Respondent's arguments: Petitioners caused huge loss through tax evasion and bogus bills; offense committed with deliberate design for personal profit; allegations are serious; petitioners may tamper with evidence if released on bail; reliance on an order denying bail where investigation was incomplete.