Pankaj Garg S/O Late Sh. Ramkishan Garg vs. Union Of INDIA

Held

The Court allowed the bail applications. The reasoning appears to be based on the petitioners' contentions that their alleged acts would fall under Section 132(1)(f) of the C.G.S.T. Act, which carries a maximum sentence of six months. The Court considered the arguments put forth by the counsel for the petitioners and deemed it proper to grant bail. The ratio decidendi is that for offences where the maximum punishment is relatively short, and the petitioners have been in custody for a significant period, bail may be granted, especially when there are disputes regarding their direct involvement in serious fraudulent activities like creating fake invoices or availing input tax credit. The operative directions are that the petitioners shall be released on bail upon furnishing a personal bond of Rs. 5,00,000/- with two sureties of Rs. 2,50,000/- each. They must surrender their passports and cannot leave India without prior court permission. No issue was expressly left undecided.

Facts

These are bail applications filed under Section 439 of the Cr.P.C. by Hemant Kumar Singhal and Pankaj Garg. The case against them was registered for offences under Section 132(1)(b)(c)(f) of the Central Goods and Services Tax Act, 2017. The petitioners are in custody, with Hemant Kumar Singhal having been in custody for three months. The alleged main accused, Abhishek Singhal, is absconding. The total input tax credit calculated by the authorities is approximately 6 crores. The petitioners deny creating fake bills/invoices or availing/passing on input tax credit, with Pankaj Garg alleging his documents were misused and he has filed an FIR.

Key Issues

1. Whether the petitioners' alleged involvement in the creation of fake firms and facilitation of input tax credit falls under Section 132(1)(f) of the C.G.S.T. Act, for which the maximum punishment is six months, thereby warranting bail? Petitioner's Arguments: The petitioners contend that their case would not extend beyond Section 132(1)(f) of the C.G.S.T. Act, with a maximum punishment of six months. They deny creating fake bills/invoices or availing/passing on input tax credit. Hemant Kumar Singhal argues he is being arrested solely due to his relationship with the main accused, Abhishek Singhal, who allegedly facilitated GST registration for 38 fake firms. Pankaj Garg claims his mobile number was used in the registration of S.L. Trading Company, and his documents were misused by Abhishek Singhal, for which he has filed an FIR. They rely on Sanjay Chandra vs. CBI. Respondent's Arguments: The Union of India opposes the bail applications, arguing that economic offences constitute a separate class requiring a different approach. They assert that economic offences involve deep-rooted conspiracies, huge losses of public funds, and are grave offences affecting the nation's economy. They rely on P.V. Ramana Reddy vs. UOI.