Delay In Concluding Trial A Significant Consideration While Deciding Bail Applications: Gujarat High Court

The Applicant-accused herein sought regular bail under Section 439 CrPC, in connection with offences under sections 132(1)(b), 132(1)(c) read with section 132(1)(i) and section 132(5) of the and section 132(1)(b), 132(1)(c) read with section 132(1)(i) and section 132(5) of the Gujarat GST Act, 2017 and section 120(B) of the IPC.

The case pertained to creation of shell companies, passing on inadmissible Input Tax Credit ('ITC') by issuing invoices without any actual supply of goods. The Applicant was accused of unauthorizedly receiving and utilizing ITC of INR 10.29 crores, passing of fraudulent ITC to its buyers by way of creating a chain of bogus firms without physical receipt and supply of goods.

Accordingly, the Applicant was arrested in September 2021 under Section 69 of the CGST Act 2017 wherein he was sent to judicial custody. Subsequently, his bail plea was rejected under Section 437 of CrPC. Later, the criminal miscellaneous application was also rejected in October 2021.

The foremost contention of the Applicant was that he was arrested without any basis or evidence. Further, he was engaged in the business of ferrous scrap, iron etc and was holding registration under the erstwhile VAT regime and thereafter the GST regime under Section 139 which showed that he was a tax paying citizen and his business was not merely conducted on paper.

Even during the de-sealing procedure, the officers also found stock containing iron scrap at the business premises of the Applicant which was supported by legal and valid documents and invoices. An additional averment was that the GST Act was a fiscal statute and the object of the statute was to provide a mechanism to recover the amount payable to the Government under Section 69(1). Yet, no such steps were taken by the Government.

Per contra, the Respondent Authority contested that the iron scrap in the Applicant's shop premises was without stock register, which was mandatory under Section 35 of the CGST Act. Accordingly, the goods were seized under Section 67 of the Act. Attempts were also made to locate the principal place of business but the location could not be found. Hence, it was concluded that this entity did not exist.

Findings

At the outset, the Court noted that trial in this case will take its own time to conclude.

Reiance was placed on Sanjay Chandra Vs. CBI, [2012 1 SCC 40] where the Supreme Court had observed that in deciding bail applications, 'delay in concluding the trial' must be considered as a relevant factor.

The Bench then referred to Section 138 of the CGST Act which makes provision for compounding of offences even after institution of prosecution, on payment by the person accused of the offence. In this backdrop, the Court averred,

"Taking into consideration the provisions of law and the fact that the Commissioner is empower to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant."

The bail plea was this allowed subject to furnishing a personal bond of INR 1,00,000 with one surety of like amount.

Case Title: MOHSIN SALIMBHAI QURESHI Versus STATE OF GUJARAT

Case No.: R/CR.MA/91/2022

Citation: 

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