Lalit Kumar Chaudhary vs. Union Of INDIA And Another

Held

The Court allowed the bail application. It noted that the grant of bail is the rule and refusal is the exception, aimed at ensuring a fair trial. While the gravity of the offence, particularly economic offences, must be considered, it is not an absolute bar to bail. The Court referenced Supreme Court judgments in Gurbaksh Singh Sibbia and Sanjay Chandra, emphasizing that bail considerations should be case-to-case, based on facts, and that the primary purpose of bail is to relieve the accused of imprisonment and ensure their attendance at trial. The Court found that the trial had not yet commenced, the applicant's complicity was yet to be determined, and all relevant evidence was under the department's control. Given that the alleged offence is punishable with a maximum of five years imprisonment and the applicant had been in custody since May 1, 2024, the Court opined that the applicant had made out a case for bail without commenting on the merits. The applicant was released on bail subject to furnishing a personal bond and sureties, and adhering to conditions including appearance in court, not committing similar offences, not tampering with evidence, not engaging in criminal activity, and surrendering his passport.

Facts

The applicant, Lalit Kumar Chaudhary, sought bail in a case involving alleged violations of Sections 132(1)(c) and 132(1)(i) of the C.G.S.T. Act, 2017, initiated by the D.G.G.I., Meerut. The prosecution alleged that M/s Okito Tradeco LLP, a firm where the applicant is a partner, availed Input Tax Credit (ITC) from suspicious suppliers who were non-existent or had obtained GST registration using forged documents. Searches conducted on April 30, 2024, revealed these suppliers were not at their registered addresses. Incriminating documents and digital evidence, including WhatsApp chats, were recovered, indicating cash transactions and the issuance of invoices without actual supply of goods. The applicant admitted to preparing excel sheets detailing these transactions. M/s Okito Tradeco LLP allegedly availed ITC amounting to Rs. 8,47,08,391/- from these non-existent suppliers. The applicant was arrested on May 1, 2024.

Key Issues

1. Whether the applicant is entitled to bail in light of the alleged economic offence and the evidence collected by the Directorate General of GST Intelligence (DGGI)? (Mixed law and fact, concerning Sections 132(1)(c) and 132(1)(i) of the C.G.S.T. Act, 2017, and principles of bail jurisprudence). Petitioner's Arguments: - The applicant is innocent and falsely implicated. - No notice for GST recovery has been issued against him. - Provisions of Sections 41, 41-A of CrPC and Section 69 of the C.G.S.T. Act were not complied with. - The applicant has not caused revenue loss or evaded tax. - Prosecution requires previous sanction from the Commissioner. - Statements recorded by departmental officers are not relevant without cross-examination. - Applicant's signature was obtained by force. - Custodial interrogation is not required as evidence is with the department. - The applicant has been in jail since May 1, 2024, and the trial has not commenced. - The alleged offence is punishable with a maximum of five years imprisonment. - Relied on several bail application judgments from the Allahabad High Court. Revenue's Arguments: - M/s Okito Tradeco LLP availed and utilized ITC from suspicious, non-existent suppliers. - Searches confirmed the non-existence of suppliers and the use of forged documents for GST registration. - Fraudulent ITC was availed through bills without concomitant supply of goods.