Manish vs. State Of Haryana

Held

The Court held that while the evidence collected during the investigation points towards the complicity of the petitioners, particularly regarding the registration of bogus firms using their email IDs and phone numbers, and Rajesh Mittal's role as an authorized signatory, the delay in the trial process warrants granting bail. The Court noted that the challan was presented approximately two years prior, yet charges had not been framed. Furthermore, an amount of approximately ₹6 crores had been recovered through compounding from the industrial units that benefited from the bogus bills. The petitioners had been in custody for a substantial period of about 2.5 years, and the conclusion of the trial was likely to consume considerable time, as it had not even commenced. Considering these factors, the Court found no useful purpose in further detaining the petitioners. Therefore, the petitions for regular bail were accepted. The Court directed the trial court to endeavor to hear arguments on the framing of charges expeditiously on the next scheduled date (November 2, 2021) and to proceed with the matter promptly. The accused were directed to cooperate with the trial proceedings, and the trial court was empowered to cancel bail if the accused failed to cooperate or resorted to dilatory tactics, after issuing notice.

Facts

This judgment concerns three bail petitions filed by Manish, Rajesh, and Inder Partap Singh, arising from FIR No. 571 dated June 4, 2019, registered under various sections of the Indian Penal Code at Police Station Chandni Bagh, District Panipat. The FIR alleged that the petitioners were involved in a racket causing significant loss to the exchequer through fraudulent GST transactions. The prosecution claimed that the accused floated bogus firms, entered into fake transactions with larger firms to facilitate GST evasion, and deprived the State of legitimate GST revenue. During a raid, the petitioners were apprehended with laptops, cheque books, and fake rubber stamps. Investigation revealed that Rajesh Mittal was the alleged kingpin, creating forged bills from a defunct company, M/s Lalit Trading Company, to show sales to 18 bogus firms. These firms, incorporated with individuals of limited means, then issued bills to 421 industrial units in Panipat, inflating their expenditures and claiming GST credit. The accused allegedly facilitated this by withdrawing funds from the bogus firms' accounts and returning them to the industrial units after retaining a percentage. The total fraudulent transactions were estimated at over ₹1325 crores, leading to an estimated GST evasion of ₹80 crores.

Key Issues

1. Whether the petitioners are entitled to regular bail given their alleged involvement in a large-scale GST evasion scam involving fraudulent transactions exceeding ₹1325 crores, causing an estimated loss of ₹80 crores to the State Exchequer, and the recovery of incriminating documents and items from their possession? (Mixed question of law and fact, concerning Sections 439 of the Code of Criminal Procedure, 1973, and principles of bail). 2. Whether the prosecution of the petitioners under the Indian Penal Code for cheating and forgery constitutes double jeopardy, considering they are also facing proceedings under Section 132 of the GST Act for the same underlying transactions? (Question of law, concerning Section 300 of the Code of Criminal Procedure, 1973). Petitioner's arguments: The petitioners argued that there is no concrete evidence to establish their involvement in the alleged scam and that they have been falsely implicated. They contended that the current FIR is a case of double jeopardy as they are already being prosecuted under Section 132 of the GST Act, for which they have been granted bail. They further submitted that the entire loss of ₹80 crores has been made good by the industrial units of Panipat, who were the beneficiaries and the real accused. The petitioners also highlighted that they have been in custody for approximately 2.5 years and that the alleged defrauded amount has already been recovered. Revenue's arguments: The State argued that the FIR pertains to allegations of cheating and forgery, which are distinct from the complaint under Section 132 of the GST Act, and therefore, it cannot be termed as double jeopardy. The State presented evidence indicating that the 18 firms were registered by the petitioners, citing common email IDs, phone numbers, and bank account operators. They identified Rajesh Mittal as the kingpin, who registered himself as the authorized signatory for several fake firms and furnished his personal details. Incriminating evidence, including bogus stamps, was allegedly recovered at his instance. Manish and Inder Partap Singh were described as close associates, with firms registered in their names. The State also noted that money transfers occurred from the fake firms' accounts to the petitioners' personal accounts, indicating complicity. They further submitted that there has been no substantial change in circumstances since the dismissal of their earlier bail petition on February 25, 2020.