Darshan Dinesh Patel vs. Commissioner Of Central Goods And Services Tax

Held

The Court allowed the application for regular bail. The Court considered that the applicant had been in jail since December 23, 2019. The allegation against the applicant was that he committed an offence punishable under Section 132(1)(b) of the CGST Act, 2017, by wrongly availing input tax credit and passing it on to the buyer. However, the Court noted that for the alleged transaction, the respondent department could take departmental action for recovery of penalty. The Court also took into account the undertaking by the applicant's counsel that the applicant was willing to deposit Rs. 25 lakh before the respondent No. 2 within 8 weeks of his release and would cooperate with the department. The Court relied on the principles laid down by the Hon'ble Apex Court in Sanjay Chandra Vs. Central Bureau of Investigation. The applicant was ordered to be released on bail upon executing a personal bond of Rs. 10,000 with one surety, subject to several conditions, including not misusing liberty, not acting prejudicially to prosecution, surrendering passport, not leaving India without permission, marking presence at the police station, and furnishing an undertaking to deposit Rs. 25 lakh. The Court explicitly stated that the trial court shall not be influenced by the prima facie observations made in this order.

Facts

The applicant, Darshan Dinesh Patel, filed an application for regular bail under Section 439 of the Code of Criminal Procedure, 1973. The bail was sought in connection with an offence registered by the Inspector of CGST & CE, Commissioner of Central Goods & Service Tax, Gandhinagar. The offence is punishable under Section 132(1)(b) of the CGST Act, 2017, for allegedly wrongly availing input tax credit and passing it on to a buyer. The applicant had been in jail since December 23, 2019. The applicant's counsel submitted that considering the nature of the offence, the applicant may be enlarged on bail with suitable conditions. The State opposed the bail application due to the nature and gravity of the offence.

Key Issues

1. Whether the applicant is entitled to regular bail under Section 439 of the CrPC, considering the allegations of wrongly availing and passing on input tax credit under Section 132(1)(b) of the CGST Act, 2017? Petitioner's Arguments: The petitioner argued that considering the nature of the offence, they should be enlarged on regular bail by imposing suitable conditions. They also stated that for the alleged transaction, it is open for the respondent department to take departmental action for recovery of penalty. The petitioner, without prejudice to their rights, was willing to deposit Rs. 25 lakh before the respondent No. 2 within 8 weeks of release and cooperate with the investigation. Revenue's Arguments: The respondent State opposed the grant of regular bail, looking to the nature and gravity of the offence. No specific provisions or precedents were cited by the revenue in opposition.