Prateek Garg vs. Intelligence Officer,Directorate General Of Goods And Service Tax Intelligence

Held

The Court allowed both petitions and ordered the release of the petitioners on bail. The Court noted that while serious allegations were made, they needed to be proven according to law. The offences attract a maximum imprisonment of five years, and the petitioners had been in custody since July 21, 2021. The investigation concerning the petitioners was complete, and a complaint had been filed. The Court emphasized that prolonged pre-trial incarceration is not permissible as a rule and that the presumption of innocence prevails. It was observed that necessary recoveries and seizures had been made, and there was no indication of further recoveries needed from the petitioners. The respondent's apprehension of influencing ongoing investigations into other individuals could be addressed by imposing appropriate conditions. The Court found that the petitioners are permanent residents with families, reducing the likelihood of absconding. No previous criminal history was shown. The bail was granted subject to furnishing personal bonds of Rs. 1,00,000/- each with one surety each, and specific conditions including availability for investigation, appearance in court, not tampering with evidence, not influencing witnesses, surrendering passports, and not leaving India without permission.

Facts

Two petitioners, Prateek Garg and Akshit Bansal, have filed petitions seeking bail. They were arrested on July 21, 2021, by the Directorate General of Goods and Service Tax Intelligence (DGGI) for alleged offences under Section 132(1)(b)(i) of the CGST Act and Section 20(xv) of the IGST Act. The DGGI alleges that the petitioners, in collusion with others, facilitated firms like M/s Mahesh Trading Company, M/s Rajshree Trading Company, and M/s Balaji Trading Company in issuing invoices without actual supply of goods, causing a loss of Rs. 14.33 Crores to the government revenue. A complaint was filed against them on September 19, 2021, before the Additional Chief Judicial Magistrate, Kasauli.

Key Issues

1. Whether the petitioners are entitled to bail under Section 439 of the Cr.P.C. in light of their prolonged custody since July 21, 2021, and the completion of investigation and filing of the complaint? Petitioner's Arguments: The petitioners contend that their statements under Section 70 of the CGST Act were procured under duress and are not voluntary. They argue that the case relies on documentary evidence already in the respondent's custody, and there is no possibility of tampering with evidence. They are permanent residents with family responsibilities and have no likelihood of absconding. They have undertaken to cooperate with the investigation and abide by court conditions. Respondent's Arguments: The respondent argues that the petitioners are involved in a serious offense of passing Input Tax Credit on the strength of invoices from fictitious firms. Incriminating evidence has been seized, and the petitioners made voluntary statements. The investigation into beneficiaries of fake invoices is ongoing, and releasing the petitioners could lead to influencing key persons, affecting the investigation and revenue realization.