Mohd. Tabrez Amdani vs. Union Of INDIA

Held

The Court allowed the application for bail. The Court considered that the applicants had reversed a substantial amount of ITC (Rs. 113,90,49,678/-) and had been in jail since November 29, 2022. It was noted that the offence is triable by a JMFC, and the maximum sentence for the offence is up to 5 years. Furthermore, the material evidence appears to be documentary and electronic, reducing the apprehension of tampering or influencing witnesses. The Court also found no likelihood of flight risk for the applicants. Relying on the principles laid down in Ratnambar Kaushik Vs. Union of India and other relevant legal propositions, the Court found it appropriate to release the applicants on bail. The operative directions included furnishing a personal bond of Rs. 2,00,000/- with two sureties each, submitting an affidavit detailing movable and immovable property and bank accounts, not alienating property without court permission, not acting prejudicially to the trial, appearing on all dates, and not involving themselves in similar offences in the future.

Facts

The applicants, Ashish Kumar Tiwari and Mohd. Tabrez Amdani, are seeking bail in connection with a case registered under the Central Goods and Services Tax Act, 2017. The allegations are that they issued fake invoices and fraudulently availed Input Tax Credits (ITC) amounting to Rs. 114,70,55,251/- and passed forged bills totaling Rs. 1,04,33,454/-. The applicants have been in jail since November 29, 2022. During the investigation, the applicants reversed ITC amounting to Rs. 113,90,49,678/-. Mohd. Tabrez Amdani is alleged to be the Director of M/s. Topisto Products Pvt. Ltd., and Ashish Kumar Tiwari is alleged to be an accountant in the same firm. They are also alleged to have formed four other firms for fraudulent ITC claims. The total disputed amount after reversal is stated to be less than Rs. 5 Crore.

Key Issues

1. Whether the offence under Section 132(1)(b) & (c) of the CGST Act, 2017, is bailable in nature, considering the amount involved after reversal of ITC, and if Section 132(1)(i) is attracted. Petitioner's Arguments: The applicants' counsel argued that after the reversal of a substantial amount of ITC, the remaining amount is less than Rs. 5 Crore. Consequently, the offence under Section 132(1)(i) is not attracted, and only offences under Section 132(1)(b)(c) & (ii) are applicable, which are compoundable and bailable. They also contended that the offence is triable by a JMFC with a maximum sentence of up to 3 years. Reliance was placed on the Supreme Court's decision in Ratnambar Kaushik Vs. Union of India, highlighting that in similar cases with documentary/electronic evidence and after significant incarceration, bail should be granted. Respondent's Arguments: The respondent argued that the applicants formed multiple firms to fraudulently avail ITC of a significant amount. They opposed the contention that the offence is bailable, citing a High Court order in Basudev Mittal Vs. Union of India, which was affirmed by the Supreme Court, where bail was rejected in a similar case involving ITC claims exceeding Rs. 5 Crores, despite partial deposit. The respondent also referred to Nimmagadda Prasad Vs. Central Bureau of Investigation to emphasize the seriousness of economic offences and the factors to be considered while granting bail.