Ajit Kumar Mishra vs. The State Of Jharkhand

Held

The Court held that the petitioner is not entitled to anticipatory bail. The primary issue was whether the petitioner's alleged involvement in fraudulent circular trading, leading to the misappropriation of input tax credit amounting to several crores of rupees through paper transactions without actual business, warranted custodial interrogation. The Court found that the allegations were serious, particularly the evidence of zero bank transactions for the relevant periods, which strongly suggested a lack of genuine business activity. The Court also noted the necessity of custodial interrogation to unearth the involvement of other co-accused persons in the alleged criminal conspiracy. Therefore, considering the gravity of the economic offense and the need for a thorough investigation, the Court concluded that this was not a fit case for granting the privilege of anticipatory bail. The prayer for anticipatory bail was rejected.

Facts

The petitioner, Ajit Kumar Mishra, owner of M/s. Shriram Coal Trading, sought anticipatory bail. He is accused of furnishing a false address for his business and engaging in fraudulent activities related to GST. Allegations include showing significant sales (Rs. 8,92,70,529.75) between October and December 2018 without submitting GSTR-3B for tax payment. Verification revealed discrepancies in GSTR-2A filings for various periods, with zero bank transactions for the relevant financial years. It is alleged that the petitioner, along with other entities like M/s Bharat Coal Trading and M/s Janki Coal Trading, engaged in circular trading and misused input tax credit based on paper transactions without actual movement of goods, leading to a differential amount of Rs. 8,92,70,529.75 between GSTR-1 and GSTR-3B, and a GSTDRC-07 demand of Rs. 1,51,72,687/-. Sanction for prosecution under Section 134 of the Jharkhand Goods and Services Tax Act, 2017, has been granted.

Key Issues

1. Whether the petitioner is entitled to anticipatory bail in connection with Jharia P.S. Case no. 203 of 2019, registered under various sections of the IPC and Section 132(1)(b), (c), (e) of the Jharkhand Goods and Services Tax Act, considering the serious allegations of misappropriation of input tax credit amounting to several crores of rupees through fraudulent circular trading and paper transactions without real business, as evidenced by zero bank transactions for the relevant period, and the necessity of his custodial interrogation. Arguments for the Petitioner: The petitioner's counsel argued that the allegations against the petitioner are false. They also submitted that the sanction for prosecution has already been granted by the Commissioner as envisaged under Section 134 of the Jharkhand Goods and Services Tax Act, 2017, and therefore, the petitioner should be granted anticipatory bail. Arguments for the State (Revenue): The learned Additional Public Prosecutor vehemently opposed the prayer for anticipatory bail. They contended that considering the magnitude of the misappropriation of input tax credit running into several crores of rupees, based on fraudulent circular trading without any real sale or purchase, which is evident from the zero bank transactions for the relevant period, the custodial interrogation of the petitioner is essential for the investigation to uncover the involvement of other co-accused persons. Therefore, the petitioner should not be granted anticipatory bail.