Case Law Details

Case Name : Vikas Bansal Vs UOI (Gauhati High Court)
Appeal Number : Bail Application No. 2381 of 2021
Date of Judgement/Order : 23/09/2021
Related Assessment Year :

Vikas Bansal Vs UOI (Gauhati High Court)

It is found that in his statement, recorded under Section 70 of the CGST Act, the petitioner has subscribed to the statement of aforesaid Amit Kumar made before the Senior Intelligence Officer of the CGST. It has also come out from his statement that whatever coal he had purchased from Coal Importers of Gujarat and Punjab were sold within the State of Punjab and Haryana to various small manufacturers without issuing GST invoices and such transactions were not reflected in the books of accounts although a part of such sale of coal in Punjab and Haryana was done under proper GST. The purchase documents covering the goods supplied/sold in Punjab and Haryana without issuance of GST invoices were used for generating fake GST invoices issued in the name of M/s Bansal Associates, Guwahati and to various other customers directly which includes Sri Amit Kumar also without supply of any

It has also come out from the materials on record that the State GST, Assam conducted a raid at the declared business premises of M/s Bansal Associates in Guwahati on 19.08.2021 and seized all documents, including computers, mobile, etc. He had also informed the State GST, Assam that his firm M/s Bansal Associates is already under investigation by DGGI, Guwahati Zonal Unit. The CGST authority, on verification of the materials collected against the petitioner during the course of investigation, found that the petitioner had evaded GST of Rs. 15,05,99,941/-. The 2151 e-way bills issued were also found to be bogus and the vehicles declared in those e-way bills involving tax of Rs. 7 crores had never carried any goods from Gujarat/Haryana/Ludhiana to Guwahati as claimed.

Man holding coal in hands over pile, top view

Offence in the instant case being an economic offence should be looked into from a different perspective although at the same time Court should not lose sight of the fact in respect of the right of the petitioner to get bail and court has to balance between both these aspects. At the same time, in the light of the above judgments, rendered by the Hon’ble Supreme Court, this Court also needs to look into the severity of the punishment. This Court also cannot lose sight of the fact that the petitioner has already been in custody for 30 (thirty) days till date and that there is no instance in the record to indicate that further custodial detention of the petitioner is essential for the purpose of further investigation of the case.

In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to imprisonment for 5 (five) years and with fine.

As per the materials on record, there is no indication that the petitioner, if granted bail, is likely to evade the trial or there is an apprehension of his tampering with the witnesses. On the other hand, this Court has also taken note of the fact that he being a resident of the State of Assam, there is every possibility of securing his presence at the time of trial. The maximum punishment which can be imposed in this case is imprisonment for 5 (five) years and fine, and as such, the severity of punishment which conviction will entail has also been taken into consideration, as mandated by Jagan Mohan Reddy (supra).

In view of the discussions above, in the considered view of this Court, the accused-petitioner deserves to be granted bail.

Accordingly, the accused-petitioner, named above, be released on bail in connection with the abovementioned case on furnishing bail bond of Rs. 1,00,000/- (one lakh) with two suitable sureties of the like amount, to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati.

FULL TEXT OF THE JUDGMENT/ORDER of GUWAHATI HIGH COURT

This is an application, filed under Section 439 of the Cr.PC. seeking bail of the accused-petitioner, namely, Sri Vikas Bansal, in connection with GST Case No. CGST/DGGI/INV/GST/2337/2021 for contravention of Sections 132(1)(b)/132(1)(c)/132(1)(f), punishable under Section 132(1)(i) of the Central Goods and Services Act, 2017 (hereinafter referred to as “CGST Act”).

[2] Heard Mr. D Sahu, learned counsel for the petitioner. Also heard Mr. SC Keyal, learned Senior Standing Counsel, CGST for the respondent.

[3] It has come out from the facts of this case that one Amit Kumar, proprietor of Maruti Traders having GSTIN-18AKGPK7676Q1Z4, and his accomplice Sri Sourav Bajoria, proprietor of M/s Bajoria Associates, Swaroopa Bhawan, Ground Floor, Near AG Bus Stop, Guwahati were arrested by the competent authority under the CGST Act in connection with GST Case No. CGST/DGGI/GST/1928/2021, under Section 132(5) of Central Goods and Service Act, 2017.

[4] During the investigation of the said GST Case No. CGST/DGGI/GST/1928/2021, the authorities under the CGST Act had requested the DGGI, Ludhiana Zonal Unit, to carry out follow up searches at the premises of one of the suppliers to M/s Maruti Traders, namely, M/s Bansal Associates (Legal Name-Vikas Bansal) having GST:03CEPPB5183L1ZA, shop No. 80, 81 cabin No. 18, 3rd floor, Deepak Complex, Gill Road, New Grain Market, Ludhiana, Punjab-141003. Accordingly, search was conducted by the officers of DGGI, Ludhiana Zonal Unit, on 14.07.2021 and no record of business transactions was found at the declared premise. Later on, statement of Vikas Bansal (accused petitioner), proprietor of M/s Bansal Associates was recorded in Ludhiana and he stated that all his documents regarding his business transaction are kept in his Guwahati office. The officers of DGGI Ludhiana Zonal Unit also seized his mobile phone on 14.07.2021 and forwarded the same vide letter F. No. IV(6)LdZU/INV/Maruti/75/2021-22, dated 19.07.2021 in sealed condition along with the statement of the present petitioner and Panchnama drawn during search along with other relevant documents.

[5] Thereafter summon was issued to the accused-petitioner under CBIC-DIN-202108DEE00C3CEC, dated 17.08.2021 under Section 70 of the CGST Act, and directed him to appear before the Senior Intelligence Officer on 23.08.2021. Accordingly, the accused-petitioner appeared before them on the said date and the mobile phone forwarded by DGGI, Ludhiana Zonal Unit, belonging to the accused-petitioner, was opened and verified in his presence and in presence of two independent witnesses under Panchnama, dated 23.08.2021. The said mobile phone contained large amounts of incriminating documents and print-out records/documents of documents folder of the mobile handset totalling to 537 pages were taken in the presence of the accused-petitioner and Panchas. These records have also been signed and verified by the accused-petitioner being the owner of the mobile handset. The statement of the accused-petitioner was recorded on 23.08.2021 under Section 70 of CGST Act.

[6] It also appears from the complaint that Amit Kumar, the accused in GST Case No. CGST/DGGI/GST/1928/ 2021, had stated before the Senior Intelligence Officer of the CGST that M/s Bansal Associates, Punjab and M/s Bansal Associates, Haryana did not supply coal to him and he had only received fake bills issued from the said units of M/s Bansal Associates and such statements of said Amit Kumar have been subscribed by the present petitioner in his statement, recorded under Section 70 of the CGST Act.

[7] I have perused the petition and the annexures furnished therewith. The learned Senior Standing Counsel, CGST, Mr. Keyal has submitted that he is ready with the records of the case and has also produced the same in the Court.

[8] On perusal of the entire materials on record, it is found that in his statement, recorded under Section 70 of the CGST Act, the petitioner has subscribed to the statement of aforesaid Amit Kumar made before the Senior Intelligence Officer of the CGST. It has also come out from his statement that whatever coal he had purchased from Coal Importers of Gujarat and Punjab were sold within the State of Punjab and Haryana to various small manufacturers without issuing GST invoices and such transactions were not reflected in the books of accounts although a part of such sale of coal in Punjab and Haryana was done under proper GST. The purchase documents covering the goods supplied/sold in Punjab and Haryana without issuance of GST invoices were used for generating fake GST invoices issued in the name of M/s Bansal Associates, Guwahati and to various other customers directly which includes Sri Amit Kumar also without supply of any goods covered under such invoices.

[9] It has also come out from the materials on record that the State GST, Assam conducted a raid at the declared business premises of M/s Bansal Associates in Guwahati on 19.08.2021 and seized all documents, including computers, mobile, etc. He had also informed the State GST, Assam that his firm M/s Bansal Associates is already under investigation by DGGI, Guwahati Zonal Unit. The CGST authority, on verification of the materials collected against the petitioner during the course of investigation, found that the petitioner had evaded GST of Rs. 15,05,99,941/-. The 2151 e-way bills issued were also found to be bogus and the vehicles declared in those e-way bills involving tax of Rs. 7 crores had never carried any goods from Gujarat/Haryana/Ludhiana to Guwahati as claimed.

[10] It has further come out from the materials so far collected that the petitioner had made statement under Section 70 of the CGST Act admitting the allegations made against him in the instant case. On perusal of the statement so recorded under Section 70 of the CGST Act, it appears that the petitioner has made incriminating statement while answering the questions put to him. The answers indicate that he has co-operated with the investigation of the case.

[11] It has also come out from the materials on record as well as from the statement made by the accused-petitioner in the instant petition by the petitioner that he had appeared before the CGST authority in compliance to the summon. He did not evade the appearance before the CGST authority. After his appearance, however, the CGST authority arrested him.

[12] Sahu, learned counsel for the accused-petitioner has submitted that the petitioner has been fully co-operating with the investigation of the case and no further custody of the petitioner has been sought for by the CGST authority for the purpose of further investigation of the case. It has further been submitted that the co-accused of this accused-petitioner have been granted default bail by the learned court below in connected cases as the complainant/CGST authority failed to complete the investigation and lay offence report within the statutory period of 60 (sixty) days.

[13] This Court records that the learned Senior Standing Counsel, CGST, Mr. Keyal has subscribed to the fact that co-accused persons have been granted default bail by the learned court below.

[14] Sahu, learned counsel for the petitioner has also further submitted that the statement given before the CGST authority by the accused-petitioner under Section 70 of the CGST Act was extracted by the said authority and it was not voluntary on the part of the accused-petitioner for which he has filed an application before the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati for retraction of his such statement. But, the fact remains that the statement claimed to have been made by the accused-petitioner was implicating himself. Section 70(1) and 70(2) of the CGST Act reads as follows:-

70 (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a

“judicial proceedings” within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).”

It appears from the provisions of Section 70(2) of the CGST Act that the inquiry made under Section 70(1) of the said Act is deemed judicial proceedings.

[15] That being so, the statement of the accused-petitioner was recorded under Section 70 of the CGST Act and the retraction of the same would definitely be considered by the appropriate court at appropriate stage. Be that as it may, the position as of now is that the petitioner not only made statement under Section 70 of the CGST Act but he made implicating statement. It also appears from such statement that he has co-operated with the investigation and there is no allegation that he has not co-operated with the investigation of the case.

[16] The learned counsel for the petitioner has referred to a decision of the Hon’ble Supreme Court of India in the case of Jagan Mohan Reddy vs. Central Bureau of Investigation, reported in (2013) 7 SCC 439 and particularly paras 34 and 35 thereof, which are quoted below:

34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.”

[17] This Court has also taken into consideration the decision rendered by the Hon’ble Supreme Court of India in the case of P. Chidambaram vs. Directorate of Enforcement, reported in (2020) 13 SCC 791 and particularly para 16 thereof. The said para is quoted below for convenience of consideration of the parameters laid down therein at a later stage of this order:-

16. Though we have heard the matter elaborately and also have narrated the contention of both sides in great detail including those which were urged on the merits of the matter we are conscious of the fact that in the instant appeal the consideration is limited to the aspect of regular bail sought by the appellant under Section 439 of the Cr.PC. While stating so, in order to put the matter in perspective it would be appropriate to take note of the observation made by us in the case of this very P. Chidambaram v. CBI, Criminal Appeal No. 1603 of 2019 which reads as hereunder:

21. The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail:

(i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution;

(ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses;

(iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence;

(iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused;

(v) larger interest of the public or the State and similar other considerations.

22. There is no hard-and-fast rule regarding grant or refused to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion of the court has to be exercised judiciously and not in an arbitrary manner.”

[18] This Court has also taken note of the submission that no leniency be shown to the accused-petitioner while considering the prayer the offences being economic in nature. This Court has also considered the decision rendered by the Hon’ble Supreme Court of India in the case of Nimmagadda Prasad vs Central Bureau of Investigation, reported in (2013) 7 SCC 466, and particularly paras 23, 24 and 25 thereof. The said paras are quoted herein below for convenience of consideration:

23. Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country’s economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr. (1987) 2 SCC 364 this Court, while considering a request of the prosecution for adducing additional evidence, inter alia, observed as under:-

5. The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.”

24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words “reasonable grounds for believing” instead of “the evidence” which means the Court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.”

25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

[19] There is no dispute at the bar that the offence involved in this case is compoundable. On perusal of the record, it is found that there is no entry/note in the record after 06.09.2021, meaning thereby that no further investigation is either carried out or recorded thereafter. In the meantime, the accused-petitioner has been in custody for 30 (thirty) days, as on date.

[20] The decisions rendered by the Hon’ble Supreme Court of India, referred to above, on a cumulative reading, make it appear to this Court that the offence in the instant case being an economic offence should be looked into from a different perspective although at the same time Court should not lose sight of the fact in respect of the right of the petitioner to get bail and court has to balance between both these aspects. At the same time, in the light of the above judgments, rendered by the Hon’ble Supreme Court, this Court also needs to look into the severity of the punishment. This Court also cannot lose sight of the fact that the petitioner has already been in custody for 30 (thirty) days till date and that there is no instance in the record to indicate that further custodial detention of the petitioner is essential for the purpose of further investigation of the case.

[21] In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to imprisonment for 5 (five) years and with fine.

[22] As per the materials on record, there is no indication that the petitioner, if granted bail, is likely to evade the trial or there is an apprehension of his tampering with the witnesses. On the other hand, this Court has also taken note of the fact that he being a resident of the State of Assam, there is every possibility of securing his presence at the time of trial. The maximum punishment which can be imposed in this case is imprisonment for 5 (five) years and fine, and as such, the severity of punishment which conviction will entail has also been taken into consideration, as mandated by Jagan Mohan Reddy (supra).

[23] In view of the discussions above, in the considered view of this Court, the accused-petitioner deserves to be granted bail.

[24] Accordingly, the accused-petitioner, named above, be released on bail in connection with the abovementioned case on furnishing bail bond of Rs. 1,00,000/- (one lakh) with two suitable sureties of the like amount, to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati.

The direction for bail is further subject to the conditions that the accused-petitioner:

(a) shall not leave the territorial jurisdiction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati, without prior written permission from him; who, in the event of granting permission to leave the jurisdiction, shall pass a detailed reasoned order for his decision;

(b) shall deposit his Passport/visa, etc if any, in the court of the Chief Judicial Magistrate, Kamrup (Metro), Guwahati;

(c) shall not hamper in the investigation or tamper with the evidence of the case;

(d) shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer; and

(e) shall not contact, in any form any of the witnesses of this case.

[25] The learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati while releasing the petitioner on bail, shall be at liberty to put any other appropriate condition(s) in addition to the conditions above, imposed by this Court.

[26] The petition stands disposed of accordingly.

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