Ankush vs. State Of Haryana

Held

The Court granted regular bail to the petitioner. While acknowledging the allegations of wrongful adjustment of Input Tax Credit without actual payment, the Court noted that the investigation was complete and the challan presented. The Court found that the State's apprehension of the petitioner absconding was not substantiated with material evidence when specifically questioned. The affidavit filed by the State did not mention any likelihood of the petitioner influencing witnesses or tampering with evidence. Considering the totality of circumstances, including the petitioner's custody period, completion of investigation, and lack of recovery, the Court concluded that the petitioner was entitled to bail. The Court explicitly stated that its observations were for the purpose of deciding the bail petition and not an expression of opinion on the merits of the case.

Facts

The petitioner, Ankush, proprietor of M/s Ankush Cotton and Ginning, is seeking regular bail in an FIR registered under various sections of the Indian Penal Code, including those related to cheating and fraud. The allegations are that the petitioner obtained GST registration fraudulently, engaged in willful misstatement and suppression of facts, and wrongly availed and utilized Input Tax Credit (ITC) for tax liabilities without actual payment, causing loss to the State exchequer. The FIR was registered on 06.03.2019, and the petitioner has been in custody since 17.02.2021. The challan has been presented, and investigation is complete. A letter from the Excise and Taxation Officer indicated a penalty of Rs. 41,364/- was imposed on the firm, and no refund was claimed.

Key Issues

1. Whether the FIR and the subsequent proceedings under the Indian Penal Code constitute an abuse of the process of law, given that alleged irregularities in GST compliance should be dealt with under the GST Act, not the IPC? 2. Whether the petitioner is entitled to regular bail considering the completion of investigation, presentation of challan, and the absence of any recovery to be effected from him? Petitioner's Arguments: The petitioner argued that the FIR was an abuse of process as the allegations of a non-existent firm and fraudulent GST registration were contradicted by a letter from the Excise and Taxation Officer showing the firm's existence and imposition of a penalty. He contended that any GST payment irregularities should be addressed under the GST Act. He also submitted that the disclosure statement leading to the addition of Section 201 IPC was inadmissible. He further argued that since investigation is complete and no recovery is to be made, he should be granted bail. Respondent's Arguments: The State argued that the petitioner committed an offense by using a fraudulently obtained GSTIN for a non-existent firm to pass ITC on bogus transactions, amounting to a loss of Rs. 2.15 crore to the government revenue. They also stated that the petitioner destroyed records, leading to the addition of Section 201 IPC. The State apprehended that the petitioner might abscond if granted bail.