Case Law Details
Harsh Vinodbhai Patel Vs State of Gujarat (Gujarat High Court)
Gujarat High Court has granted bail to Harsh Vinodbhai Patel, who was arrested in connection with an alleged GST fraud case involving ₹22 crore in input tax credit. The bail was granted under Section 439 of the Code of Criminal Procedure, with the court noting that the investigation had been substantially completed. The case was registered with the Directorate General of GST Intelligence (DGGI) in Ahmedabad under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017, which carries a maximum punishment of five years’ imprisonment.
The petitioner’s counsel, Senior Advocate Nirupam D. Nanavati, argued that the arrest was unlawful as it was not supported by the Commissioner’s “reason to believe” that an offense under Section 132 had been committed. The defense also pointed out that the arrest was authorized by an Additional Commissioner of the Sales Tax Department, which they claimed was procedurally incorrect. Given that Patel had already been in custody for 60 days and that the investigation was complete, the defense sought his release on bail.
The prosecution, represented by the Additional Public Prosecutor and GST Intelligence counsel Priyank Lodha, strongly opposed the bail plea. They argued that Patel was involved in generating fake invoices to avail fraudulent input tax credit and that the investigation was still ongoing. However, the court noted that the case primarily relied on documentary evidence, all of which had already been seized. It also observed that the trial was unlikely to begin soon, reducing the need for Patel’s continued detention.
The court granted bail with several conditions, including a ₹10,000 bond, restrictions on travel, and a requirement to surrender his passport. Patel was also directed not to tamper with evidence or influence witnesses. This ruling aligns with past judicial precedents, including P. Chidambaram v. Directorate of Enforcement (2019), where the Supreme Court emphasized that pre-trial detention should not be punitive when investigations are substantially complete. While Patel has been granted bail, the case against him will continue as per legal procedures.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Learned APP waives service of notice of Rule on behalf of respondent-State.
2. This application is filed under Section 439 of the Code of Criminal Procedure for regular bail in connection with File No. DGGI/INV/GST/3590/2023-GrA-O/o ADG- DGGI-AHMEDABAD registered with Office of the Additional Director General, DGGI, AZU, Ahmedabad.
3. Learned senior advocate Mr. Nirupam D. Nanavati with learned advocate Mr. Chetan Pandya appearing for the applicant submits that the present applicant has been illegally arrested in the alleged offence by the Investigating Agency under the provisions of Section 69 of the Central Goods and Services Tax Act, 2017. It is submitted that as per the said provision, the Commissioner has to have a reason to believe that the persons have committed offence specifying under Clause A, B, C and D of Sub-Section 132 of the said Act.
3.1 In the present case, the arrest memo does not indicate that the Commissioner had mentioned such reason to believe that the applicant had committed such offence enumerated herein above. He further submits that the authorisation for arrest has been signed by the Additional Commissioner of Sales Tax Department, which is completely illegally and therefore, arrest of the present applicant is also illegal. He further submits that the applicant has been arrested for the offence in question on 13.10.2023 for a period of 60 days, which is already got over. The entire investigation is actually over and now only the formalities for filing complaint (charge-sheet) is to be undertaken by the authorities in The presence of the present applicant is no more required in police custody for the purpose of investigation. He, therefore, submits that by allowing present application, the applicant may be enlarged on regular bail by imposing suitable conditions.
4. The learned APP appearing for the respondent State vehemently submits that the offences which have been charged, are serious in nature and looking to the facts as well as the allegations made against the applicant, no discretion would be required to be exercised.
5. Learned Standing Counsel Mr. Priyank Lodha appearing on behalf of Goods and Service Tax Intelligence (GST) submits that the applicant has accompanied in commission of offence in question. It is submitted that the applicant has illegally availed input tax credit worth of Rs.22 Crore. It is submitted that in the present offence, on the basis of fake invoices, no transaction or sale were found as stated in the said invoices and despite the same, those invoices were generated. On the basis of said invoices, input tax credit were availed by the present applicant.
5.1 Learned advocate Mr. Lodha referring to the affidavit-in-reply filed by Mr. Dharamvirsinh Jadeja, opposing the present application, submits that the investigation is still in progress. He, therefore, submits to dismiss the present application.
6. Heard learned advocates for the respective parties and perused the documents on record.
7. Having perused the record, it appears that the present applicant has been arrested in connection of the offence punishable under Section 132(1)(c) of the Central Goods and Services Act, 2017 for which punishment is five years of imprisonment. The applicant is arrested on 13.10.2023 and since then the applicant is in custody. The investigation appears to be virtually over. The case of the prosecution rests upon documentary evidence. All the documentary evidence and other material appears to have been seized by the Investigating Agency. Therefore, presence of the present applicant does not appear to be necessary for the purpose of investigation. The trial is not likely to commence and conclude in the near future.
8. In the facts and circumstances of the case and considering the nature of allegations made in the FIR and without discussing the evidence in details as well as without going into details, prima-facie, this Court is of the opinion that this is a fit case to exercise the discretion to enlarge the applicant on bail. Hence, the application is allowed and the applicant is ordered to be released on bail in connection with the aforesaid FIR, on executing a bond of 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;
(a) shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the fact of the case so as to dissuade from disclosing such facts to the Court or any Police Officer or tamper with the evidence.
(b) shall maintain law and order and not to indulge in any criminal activities.
(c) shall 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 residence without prior permission of the trial Court.
(d) shall 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
(e) shall file an affidavit stating immovable properties whether self acquired or ancestral with description, location and present value of such properties before the Trial Court, if any.
(f) shall not leave India without prior permission of the Trial Court
(g) surrender passport, if any, to the Trial Court within a week. If accused does not possess passport, shall file an Affidavit to that effect.
9. The authorities concerned shall release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, the Sessions Judge concerned will be free to issue warrant or take appropriate action in the matter. Bail bond to be executed before the lower court having jurisdiction to try the case. It will be open for the concerned Court to delete, modify and/or relax any of the above conditions in accordance with law.
10. At the trial, the concerned trial Court shall not be influenced by the prima facie observations made by this Court in the present order.
11. Rule made absolute to the aforesaid extent. Direct service is permitted.
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