Bhagwan Sahay Gupta S/O Sh. Ramkaran Gupta vs. Union Of INDIA

Held

The Court allowed the bail application. It took note of the petitioner's custody period of one year and five months. The Court also considered that the petitioner has a child and took into account the contentions put forth by the petitioner's counsel. The Court did not explicitly address the specific legal arguments regarding the sections of the CGST Act or the extent of the petitioner's involvement in the alleged input tax credit fraud. The operative direction was to release the petitioner on bail upon furnishing a personal bond of Rs.1,00,000/- with two sureties of Rs.50,000/- each, with the stipulation to appear before the trial court on all subsequent dates.

Facts

The petitioner, Bhagwan Sahay Gupta, a Chartered Accountant, filed a bail application under Section 439 of Cr.P.C. He is accused of offenses under Section 132(1)(i) and (iv) read with Sub-Section (5) of the Central Goods & Service Tax Act, 2017. The complaint alleges that the petitioner created firms based on documents provided by co-accused and charged fees for filing GST returns. The petitioner claims his statement was retracted due to alleged beating, and a complaint was filed by the department regarding his fee structure. The charge-sheet states he received Rs.75,000/- for filing returns and Rs.5,000/- per firm for registration. The petitioner has been in custody since January 23, 2021.

Key Issues

1. Whether the petitioner is entitled to bail considering his period of custody and the alleged offenses under the Central Goods & Service Tax Act, 2017? The petitioner's counsel argued that the petitioner, a Chartered Accountant, created firms based on documents from co-accused and his statement was retracted due to alleged mistreatment. He contended that the complaint does not allege receipt of any amount related to wrong input tax credit, and the petitioner received a limited sum for filing returns and registration. The maximum sentence for the offense is stated to be six months, and the offense is triable by a First Class Magistrate. The Union of India's counsel opposed the bail, arguing the petitioner was instrumental in registering 11 fake firms that availed input tax credit of Rs.146 crores and was aware of filing returns for non-existent firms. They contended the petitioner is charged for an offense with a five-year sentence and cited a Co-ordinate Bench's rejection of bail in a similar case involving a Chartered Accountant.