Kushal Gupta vs. Union Of INDIA And Another

Held

The Court allowed the bail application of Kushal Gupta. The Court considered the submissions of both sides, the nature of the accusation, the severity of punishment, the supporting evidence, and the reformative theory of punishment, along with the mandate of Article 21 of the Constitution. Citing the Apex Court's dictum in Dataram Singh v. State of U.P. and another, the Court found it to be a case for bail without expressing any opinion on the merits of the case. The applicant was directed to be released on furnishing a personal bond and two sureties to the satisfaction of the court concerned, subject to conditions including cooperation with trial proceedings, not tampering with witnesses, and not indulging in illegal activities. The Court clarified that its observations were confined to the bail application and not reflective of the ultimate merits of the case. The identity and residential proof of sureties were to be verified, and breach of conditions would lead to cancellation of bail.

Facts

This case involves a bail application filed by Kushal Gupta, the applicant, who was arrested in connection with a case under Section 132(1)(b) of the CGST Act, 2017. The prosecution alleges that M/s. Shree Shyam Ji Traders, Delhi, fraudulently availed Input Tax Credit (ITC) amounting to Rs. 4.76 Crores (later enhanced to Rs. 5.19 Crores) from two firms, M/s. A.D. Print Pack and M/s. Radhey Krishna Enterprises. The applicant, an employee of M/s. Shree Shyam Ji Traders, claims innocence and states that the proprietor, Archit Agrawal, who is the main beneficiary, has not been arrested or made an accused. The applicant was summoned for his statement under Section 70 of the CGST Act and subsequently arrested, with the applicant arguing that responsibility was wrongly shifted to him. No proceedings under Section 74 or attachment orders under Section 83 of the CGST Act have been initiated.

Key Issues

1. Whether the applicant, Kushal Gupta, is entitled to be released on bail in Case DGGI/ARU/Gr.B/ST No. 29 of 2020 under Section 132(1)(b) of the CGST Act, 2017, considering his role as an employee and the alleged fraudulent ITC availed by his employer's firm. Petitioner's Arguments: The applicant is innocent and falsely implicated. He was summoned under Section 70 of the CGST Act for his statement and then illegally arrested, with responsibility shifted from the proprietor, Archit Agrawal, to him. The applicant, as an employee, was not the beneficiary of the alleged fraudulent ITC. The proprietor, Archit Agrawal, who is the main beneficiary, has not been made an accused. The sanction order under Section 132(6) was granted without proper application of mind. No proceedings under Section 74 or attachment under Section 83 have been initiated. The offence is triable by a Magistrate with a maximum sentence of three years, and the applicant has been in jail for over seven months with no criminal history. Revenue's Arguments: The Revenue opposed the bail prayer but did not dispute the facts presented by the applicant.