Paritosh Kumar Siingh @ Diwakar Choudhary vs. Senior Intelligence Officer

Held

The Court rejected the bail application. The Court noted that the applicants allegedly created fictitious firms in a planned manner with the intention to commit economic crimes. The applicants failed to provide material evidence to establish the existence of the firms they created. The Court emphasized that economic offences constitute a class apart and have serious repercussions on the country's economic structure, citing the Supreme Court's observations in Nimmagadda Prasad vs. Central Bureau of Investigation. The Court found that the manner in which the crime was committed indicated deliberate design for personal profit, disregarding the community's interest. The Court also noted that the investigation is ongoing in different zones of the Department. Therefore, considering the gravity of the economic offence and the ongoing investigation, the Court held that the applicants are not entitled to regular bail at this stage. The bail application was accordingly rejected.

Facts

This is a bail application filed by four applicants under Section 439 of the Code of Criminal Procedure, 1973. The applicants are in custody since January 25, 2021, in connection with a case registered by the Directorate of GST Intelligence, Raipur. The Directorate's investigation revealed that the applicants allegedly formed forged firms across multiple states, availed illegal input tax credits, and caused a loss of approximately Rs. 258 Crore to the government exchequer during the financial years 2018-19, 2019-20, and 2020-21. The applicants were arrested on January 25, 2021, and a complaint case was filed on March 25, 2021. Their bail application was previously rejected by the lower court on August 13, 2021.

Key Issues

1. Whether the applicants are entitled to regular bail given their prolonged custody and the nature of the alleged economic offence under Section 132 (1) (b) and (c) of the Goods and Services Tax Act, 2017? Petitioner's Arguments: - The applicants created firms for which registration is not mandatory, and the allegation of non-existence is not sufficient proof. - Their arrest prior to the filing of a charge sheet and the subsequent filing of a complaint under Section 200 CrPC indicate an abuse of process. - The allegation of Rs. 258 Crore loss is unsubstantiated by data. - Other beneficiaries of the transactions have not been made accused. - The offence under Section 132 (1) is compoundable under Section 138, and the maximum sentence is five years. - Reliance was placed on Prasad Purshottam Mantri vs. Union of India & ors and a previous order of the same High Court. Non-applicant's Arguments: - Fake firms were created, involving fake business transactions of Rs. 1400 Crore and input tax credit of Rs. 258 Crore. - Applicants 3 & 4 admitted involvement in generating fake input tax credits. - Money was transferred without procurement of goods or services. - Applicants are instrumental in creating fictitious firms nationwide. - Applicant No. 1 admitted availing input tax credits without actual supply. - Release of applicants would hamper further investigation, which is ongoing in different zones. - Reliance was placed on Arvind Kumar Munka Vs. UOI, orders from the High Court of Orissa, and Supreme Court orders.