Gujarat High Court Grants Regular Bail to Accused in Rs. 67.72 Crore GST Fraud Case

In a notable legal development, the Gujarat High Court has granted regular bail to Parag Nathalal Haria, who was implicated in an alleged Goods and Services Tax (GST) fraud amounting to Rs. 67.72 crores.

The ruling came in an Application filed under Section 439 of the Code of Criminal Procedure for enlarging the Applicant on Regular Bail in connection with F.No. GEXCOM / AE / INV / GST / 8107 / 2023 - AE / 19.12.2023 registered with Inspector (Anti Evasion), CGST, Rajkot for the offences punishable under Sections 132(1)(b), 132(1) (c) and 132(1)(1) of the Central Goods and Service Tax Act, 2017.

Representing Haria, his counsel emphasized his engagement in legitimate business activities, particularly trading in copper scrap, brass scrap, and similar commodities, without involvement in any illicit undertakings. It was argued that all transactions conducted by Haria were legitimate, supported by valid tax invoices, and processed through official banking channels. The suppliers involved were duly registered and active at the time of transactions, with all relevant documentation readily available. The Counsel stressed the lack of substantial evidence linking Haria to any wrongdoing, apart from a possibly coerced confession.

On the opposing side, Advocate Hetvi Sancheti, representing Respondent No.2, contested the Application by arguing that the fraud in question involves a substantial amount exceeding Rs.67.72 Crores and is systematic in nature. She presented an Affidavit outlining the establishment and operation of fictitious firms allegedly used to wrongfully obtain input tax credit.

From the record, the Court while observing that the investigation was over and the charge sheet was also filed, also considering the nature of offence and the role attributed to the present Applicant, opined that the Application deserved consideration.

The Court also considered the fact that Section 132 of the GST Act describes punishment of imprisonment which may extend to 5 Years and with fine for the offence alleged against the present Applicant. The court also considered the following aspects:

(a) As per catena of decisions of the Supreme Court, there are mainly 3 factors which are required to be considered by this court i.e. prima facie case, availability of Applicant accused at the time of trial and tampering and hampering with the witnesses by the accused.

(b) That the Advocate for the Applicant has submitted that the Applicant Accused is not likely to flee away.

(c) That the Applicant is in custody since 19.12.2023.

(d) The law laid down by the Apex Court in the case of Sanjay Chandra v. C.B.I. Reported in (2012) 1 SCC 40.

Having heard the Advocates for the parties and perusing the record produced in this case as well as taking into consideration the facts of the case, nature of allegations, gravity of accusation, availability of the Applicant Accused at the time of Trial etc. and the role attributed to the present Applicant accused, the Court held that the Application deserved to be allowed.

The Court also went through the FIR and police papers and also the earlier order passed by the Sessions Court where the Sessions Judge has disallowed the bail Application at initial stage.

The Court directed, “Applicant Accused is ordered to be released on bail in connection with the aforesaid FIR on executing a personal bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court, subject to the following conditions that he shall:

(a) not directly or indirectly make any inducement, threat or promise to any person acquainted with the fact of the case so as to dissuade him from disclosing such facts to the Court or any Police Officer or tamper with the evidence.

(b) maintain law and order and not to indulge in any criminal activities.(c) furnish the documentary proof of complete, correct and present address of residence to the Investigating Officer and to the Trial Court at the time of executing the bond and shall not change the residence without prior permission of the trial Court.(d) provide contact numbers as well as the contact numbers of the sureties before the Trial Court. In case of change in such numbers inform in writing immediately to the trial Court.(e) file an affidavit stating his immovable properties whether self acquired or ancestral with description, location and present value of such properties before the Trial Court, if any.(f) not leave India without prior permission of the Trial Court(g) surrender passport, if any, to the Trial Court within a week. If the Applicant does not possess passport, shall file an Affidavit to that effect.”

Appearance:Mr. N.D.Nanavati, Senior Advocate With Mr. Apurva N Mehta(7202) For The Applicant(S) No. 1

Ms Hetvi H Sancheti(5618) For The Respondent(S) No. 2Mr. L.B.Dabhi,App For The Respondent(S) No. 1

Case No.: R/Criminal Misc.Application (For Regular Bail - Before Chargesheet) No. 778 Of 2024

Case Title: Shyamlal Parag Nathalal Haria Versus State Of Gujarat

LL Citation: 2024 Livelaw (Guj) 20

Click Here To Read / Download Judgement