An Accused Has Been Granted Bail Under Rs 19 crore GST Fraud Case

An Accused Has Been Granted Bail Under Rs 19 crore GST Fraud Case

The Delhi court recently gave bail to an accused in the case of passing off the GST credit input worth more than 19 crores rupees. While granting bail, the sitting judge Mr Sudhanshu Kaushik said that no blanket ban could be put on bail merely because a person has been accused of an economic offence. In this case, the applicant has been in custody since December 1, 2022. The report submitted by the Prosecution shows that the investigation of the accused has already concluded.

The court further added, “Prosecution has already recorded the statement of the concerned persons, including the transporters. The relevant documents have been collected. The fact that custodial interrogation of the accused is not warranted is evident from the fact that the Prosecution never moved any application for the same.”

According to the court, the Prosecution opposed the bail application because the accused may try to influence the transporters, who have already given their statements. However, the bail cannot be refused merely on the grounds of apprehension that the accused may influence transporters, especially when there are no other grounds for custodial detention.

The accused, Jagdish Bansal, was granted bail on Rs 15 lakh personal bail bond. Appearing for Jagdish Mittal, Advocate Vijay Kumar Aggarwal and Advocate Ayush Jindal argued that the offence under section 132 of the GST Act entails a maximum punishment of five years and in such cases, granting bail is the rule. However, the Magistrate dismissed the bail application on the basis of an erroneous interpretation of the law.

Advocate Vijay Aggarwal also said that the Additional Chief Metropolitan Magistrate has wrongly applied the law principles by holding that at the state of remand, the court only has to see that a prima-facie case is made out against the accused, and it cannot proceed to evaluate the evidence available on record. He also said that the Magistrate is bounded by law to record satisfaction before authorizing further detention of the accused. However, in this case, the Magistrate has not complied with the guidelines issued by the Apex Court in the case of Arnesh Kumar.

It was alleged that Jagdish Bansal had created four proprietorship concerns and illegally claimed an input tax credit (ITC) under GST based on false invoices without any actual receipt of goods. Following this modus operandi, the proprietorship concerns have passed on illegal ITC of Rs 19.67 crores. It was further alleged that Jagdish Bansal, in his statement under section 70 of the Central Goods and Services Act, 2017, admitted that he had been running fake firms and passing on ITC without any actual invoices.


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