Gujarat HC grants bail to accused in custody since october 2023 in Rs.1466 cr GST-ITC Scam amid trial delay concerns [Read Order]

The Gujarat High Court granted bail to the accused in custody from 12th October 2023 involving Goods and Services Tax ( GST) - Input Tax Credit ( ITC ) of Rs. 1466 crores with bail bond executed before the lower Court having jurisdiction to try the case. The bench of Justice MR Mengdey observed that “The offence alleged against the present applicant is punishable with imprisonment for 5 years. The applicant is in custody since 12.10.2023. The trial of the offence is not likely to commence and conclude in the near future.” The bail application was filed under Section 439 of the Code of Criminal Procedure, 1973, for regular bail in connection with File No. DGGI/INT/INTL/1520/2023 – O/0 AD-DGGI-RURAJKOT registered with Directorate General of GST Intelligence, Rajkot. Senior Advocate representing the applicant informed the court that the applicant was arrested on 12.10.2023 and has been in custody since then and has cooperated with the investigation, providing all necessary information. As a result, the authorities have filed a complaint against the applicant for the offences in question. It was also added that the offence was triable by the Court of Magistrate. The trial of the offence is not likely to commence and conclude in the near future. He, therefore, submitted to allow the present application and enlarge the present applicant on bail subject to suitable conditions. On the contrary, the respondent’s representative opposed bail application contending that the entire scam runs into Rs.1466 crores. It was submitted that as per the settled proposition of law, the punishment prescribed for the offence in question would hardly have any bearing on the aspect of consideration of the bail application. It is emphasised that the bail applicant is considered the primary offender, having allegedly gained crores of rupees through fraudulent Input Tax Credit claims. The investigation into other accomplices is ongoing, and the authorities need the applicant in custody to trace the full money trail and prosecute the remaining suspects involved in the offence. After hearing both sides and reviewing the evidence, the court observed that the investigation is finished, and the charge-sheet has been submitted. The applicant is accused of benefiting from ITC using fake records, leading to financial gains. Considering the severity of the offence and the time spent in custody since October 2023, the court doubted that the trial would start and finish soon. Referring to the principles laid down by the Supreme Court in Sanjay Chandra v. Central Bureau of Investigation, the court exercised its discretion to grant regular bail to the applicant. The applicant was ordered to be released on bail upon furnishing a personal bond of Rs. 10,000 with one surety of the same amount, subject to several conditions aimed at ensuring cooperation with the investigation and preventing misuse of liberty. The Gujarat High Court directed the applicant to surrender their passport, refrain from leaving the state of Gujarat without prior permission, mark their presence before the Directorate General of GST Intelligence, Rajkot once a month, and provide their current address to the Investigating Officer and the Court. Breach of any of these conditions would result in appropriate action by the Sessions Judge concerned. The authorities were also instructed to release the applicant only if they were not required in connection with any other offence. The bench also allowed for the modification or relaxation of the bail conditions by the concerned Court, as per the law. The court also clarified that “At the trial, the trial Court shall not be influenced by the observations of preliminary nature qua the evidence at this stage made by this Court while enlarging the applicant on bail. Rule is made absolute to the aforesaid extent.” Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates