The Gujarat High Court has allowed the bail application of a journalist in a case involving allegations of Goods and Services Tax (GST) fraud.
A Single Bench of Justice MR Mengdey passed this order while hearing a bail application filed by Maheshdan Prabhudan Langa.
The application is filed under Section 439 of the Code of Criminal Procedure, 1973, for regular bail in connection with an FIR registered with DCB Police Station, Ahmedabad.
The Advocate appearing for the applicant has submitted that the incident alleged in the FIR had taken place between 01.02.2023 to 01.05.2023, whereas the FIR came to be lodged on 07.10.2024. There is a delay in lodging the FIR. The delay caused in lodging the FIR has not been satisfactorily explained by the prosecution. The applicant has been arrested in connection with the present offence on 08.10.2024 and since then the applicant is in custody. The investigation qua the present applicant is virtually over and charge-sheet could be filed any time soon.
The Advocate further submitted that the applicant herein was running a firm viz M/s D.A Enterprise. The applicant is ready and willing to repay the amount of input tax credit, which was wrongfully availed by the applicant, as alleged in the FIR.
The Advocate also submitted that the FIR in its present form is not maintainable, as there is a separate mechanism provided under the GST Act for prosecuting such type of offences. The prosecution has interestingly not invoked any of the offences enumerated in the provisions of the GST Act and in absence of any such offence having been alleged against the applicant, the FIR alleging commission of offence under the IPC is not maintainable. The offence alleged against the applicant is non-cognizable and bailable in view of the amount involved in the present offence.
The Advocate said that the applicant is alleged to have wrongfully availed input tax credit of Rs 6,64,000/-. The maximum punishment prescribed for the offence alleged against the applicant under the provisions of GST is imprisonment for 1 year. The applicant has been arrested in connection with the present offence on 08.10.2024 and has also already undergone the imprisonment
The Advocate further said that the arrest of the applicant is illegal, as no notice under Section 41 of the Code of Criminal Procedure had been issued against the applicant.
AAG appearing for the respondent-State has opposed the
application, inter alia, contending that apart from a fraud, as regard wrongfully availing the benefit of input tax credit, an element of money laundering is also involved in the offence. One firm viz Dhruvi Enterprise had been created on the basis of forged rent agreement and other forged documents. Various firms including the firms belonging to the applicant had purchased fake invoices from the said Dhruvi Enterprise without entering into any business with the said firm and on the basis of such fake invoices, the input tax credit of the huge amount had been claimed by the accused persons involved in the offence.
AAG further submitted that the offence alleged in the FIR has a wide spread fallout. The investigation of the offence is still in progress. He, therefore, submitted to dismiss the application.
“It is the case of prosecution that one firm viz. Dhruvi Enterprise had been floated on the basis of forged and fictitious rent agreement. The applicant and the other co-accused had purchased invoices from the said Dhruvi Enterprise though there had been no transaction at all taken place between them. These invoices were forged and fictitious and on the basis of those forged and fictitious invoices, the applicant had wrongfully availed the input tax credit. The applicant showed willingness to repay the amount of Input Tax Credit wrongfully availed. So far the aspect of money laundering is concerned, there is no material on record regarding the same. The applicant has been arrested in connection with the present offence on 08.10.2024. Thus, the investigation of the offence alleged against the applicant is virtually over by now. Having regard to the same, the application deserves consideration.
In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the FIR, without discussing the evidence in detail, prima facie, the Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail,” the Court observed while allowing the bail application.
The Court ordered that,
The applicant is ordered to be released on regular bail in connection with FIR registered with D.C.B Police Station, Ahmedabad, on executing a personal bond of Rs 10,000 (Rupees Ten Thousand only) with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions that he shall;
(a) not take undue advantage of liberty or misuse liberty;
(b) not act in a manner injurious to the interest of the prosecution & shall not obstruct or hamper the police investigation and shall not to play mischief with the evidence collected or yet to be collected by the police;
(c) surrender passport, if any, to the Trial Court within a week;
(d) not leave the State of Gujarat without prior permission of the Trial Court concerned;
(e) mark presence before the concerned Police Station once in a month for a period of six months between 11.00 a.m and 2.00 p.m;
(f) furnish the present address of his residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of Trial Court;