Nileshbhai Natubhai Patel vs. The State Of Gujarat

Held

The Court dismissed the applications for anticipatory bail. Regarding the first issue, the Court held that the applicants were not entitled to anticipatory bail. The Court considered the gravity of the offense, categorizing it as an "economic offense" involving a substantial amount of public money (Rs. 137.00 Crores). The Court noted that the applicants had not cooperated with the investigating agency. The Court distinguished the case from the Supreme Court's decision in Satender Kumar Antil, stating it was not applicable due to the nature of the offense and lack of cooperation. The Court also addressed the procedural arguments, referencing a Division Bench decision of the same High Court in Vimal Yashwantgiri Goswami (supra) which held that authorized officers arresting persons under Section 69 of the GGST Act are not obliged to comply with Sections 154 to 157 and 172 of the Code of Criminal Procedure. The Court also considered the Supreme Court's observations in Sushila Aggarwal (supra) regarding guidelines for Section 438 applications but found them not applicable in the present facts. The Public Prosecutor expressed apprehension that if granted bail, the applicants would tamper with evidence and witnesses and might not be available for trial. Therefore, the Court declined to exercise its discretion in favor of the applicants.

Facts

The applicants, Chairman and Directors of M/s. Madhav Copper Limited, a public limited company, sought anticipatory bail under Section 438 of the Code of Criminal Procedure. The State Tax Department alleged that the company claimed Input Tax Credit (ITC) of Rs. 137.00 crores based on fake bills for purchases worth Rs. 762.00 crores from 36 different firms. The department further alleged that while payments were made through banking channels, the amounts were received back in cash by the applicants. The applicants contended that their purchases and sales data matched, the company produced finished copper goods, and all records were seized or available to the respondents. They also argued that the department had not followed the prescribed procedure under the Gujarat Goods and Services Tax (GGST) Act, such as calling for explanations before initiating proceedings under Sections 73 or 74.

Key Issues

1. Whether the applicants are entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, considering the allegations of claiming wrongful Input Tax Credit (ITC) amounting to Rs. 137.00 crores by obtaining fake bills for purchases worth Rs. 762.00 crores, as per Section 132 of the GGST Act. Petitioner's Arguments: - The applicants argued that the company's purchase and sales data matched, and the goods were genuinely procured and sold. - They contended that the respondent department had not followed the prescribed procedural steps under the GGST Act, such as issuing proper show cause notices and calling for explanations before initiating proceedings. - They relied on various High Court decisions that granted anticipatory bail in similar GST-related offenses and cited the Supreme Court's decision in Satender Kumar Antil for guidelines on bail. - They also argued that GST officers are not police officers and lack the power to investigate offenses under the GGST Act, and that FIR registration under Section 154 of the CrPC is mandatory before preliminary inquiry. Respondent's Arguments: - The respondent State argued that the applicants were involved in a serious economic offense involving a huge amount of public money. - They highlighted the gravity of the charges and the applicants' alleged lack of cooperation with the investigating agency. - They referred to a Supreme Court order in a similar case where anticipatory bail was not granted despite the accused having undergone significant imprisonment, emphasizing the discretion of the court in such matters.