Mohammad Abbas Shabbirali Savjani vs. State Of Gujarat

Facts

The applicant, Mohammad Abbas Shabbirali Savjani, proprietor of M/s Lucky Steel, sought anticipatory bail apprehending arrest in connection with a GST investigation. He was issued summons under Section 70 of the GGST Act and CGST Act to appear and furnish documents related to an inquiry involving M/s Gurukrupa Traders and his firm, M/s Lucky Steel. The applicant claimed he was out of town and requested a later date, submitting documents for his firm and stating no connection to M/s Gurukrupa Traders. His residential premises were also searched. The respondent State alleged the applicant was the mastermind of a scam involving fake purchases totaling Rs. 762.66 Crores from fictitious entities, leading to an input tax credit of Rs. 137.28 Crores, with money being re-routed through Aagadia firms. WhatsApp chats recovered from an associate's devices allegedly showed money trails leading to the applicant.

Held

The Court held that the applicant was not entitled to anticipatory bail. Regarding the argument that the only material against the applicant was the statement of co-accused, the Court opined that at this stage, it could not be stated that the statements of co-accused were the only material available with the department, especially in view of the material shown by the Public Prosecutor. The Court further reasoned that in a scam of such magnitude and intricacy, custodial interrogation of the applicant would be required, a right upheld by a coordinate bench. Concerning the relevancy of statements under Section 70 of the CGST Act in light of Section 136, the Court held that at the stage of anticipatory bail, the parameters laid down by the Hon'ble Apex Court in cases like Siddharam Satlingappa Mhetre and Sushila Aggarwal & Ors. would be considered. The Court found that the submissions regarding the admissibility of statements under Section 70 would not be appreciated at this stage. Considering the law laid down by the Apex Court and the seriousness of the economic offense involving a huge public money liability of Rs. 137.00 Crores, the Court was not inclined to exercise its discretionary jurisdiction under Section 438 of the Code of Criminal Procedure in favour of the applicant.

Key Issues

1. Whether the applicant is entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, considering the nature of the economic offense and the evidence collected by the investigating agency? Petitioner's Arguments: - The applicant argued that the summons under Section 70 of the CGST Act, which grants powers equivalent to a Civil Court, should be viewed in light of Section 136 of the CGST Act. Section 136 limits the evidentiary value of statements made under Section 70 unless specific conditions are met (e.g., the person is dead or unavailable). Therefore, the respondents should not arrest the applicant based solely on a Section 70 summons. - The applicant claimed to have provided all details of his firm, M/s Lucky Steel, and denied any connection to M/s Gurukrupa Traders. - The applicant stated that his name surfaced in statements of co-accused, who have now been listed as accused, and argued that arrest should not be attempted merely on the basis of such statements. - The applicant expressed willingness to cooperate with the investigation and appear before the authority if granted protection by the Court. Revenue/State's Arguments: - The State contended that the investigation revealed a scam involving M/s Madhav Copper Limited, which showed fake purchases totaling Rs. 762.66 Crores from 36 fictitious entities, availing input tax credit of Rs. 137.28 Crores. - Recovered WhatsApp chats from an associate's electronic devices allegedly show money trails leading back to the applicant. - The State asserted that the applicant appears to be the mastermind of the entire scam and a prime beneficiary. - The State relied on a previous order of the High Court in Criminal Misc. Application No. 17697 of 2021, where anticipatory bail was rejected for the person in charge of M/s Madhav Copper Limited, indicating the seriousness of the offense. - The State emphasized that custodial interrogation would be required in a scam of such magnitude.