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Case Law Details

Case Name : Vineet Gupta Vs Union of India (Rajasthan High Court)
Appeal Number : S.B. Criminal Miscellaneous Bail Application No. 7162/2023
Date of Judgement/Order : 20/07/2023
Related Assessment Year :

Vineet Gupta Vs Union of India (Rajasthan High Court)

The Rajasthan High Court has granted bail to Vineet Gupta in connection with a significant GST scam amounting to ₹21.16 crores. The case involves allegations of orchestrating fraudulent activities through fake firms and illicitly claiming input tax credit (ITC). This analysis examines the court’s decision, the legal arguments presented, and the implications of the judgment.

Legal Analysis: Vineet Gupta’s bail application under Section 439 of the Code of Criminal Procedure was contested on several grounds. His defense argued that he was falsely implicated based solely on the statements of co-accused individuals. Moreover, Gupta has been in custody since March 17, 2023, with no recoveries made from him. The defense highlighted that similar bail applications of other accused individuals had been granted by the court.

In contrast, the CGST Department contended that Gupta played a key role in a complex scheme involving the operation of eight fake firms, resulting in the wrongful claim of ITC totaling ₹21.16 crores. They argued that given the ongoing investigation involving multiple firms, Gupta’s bail application should be dismissed to prevent potential tampering with evidence.

The court considered precedents such as the Ratnambar Kaushik case, emphasizing the need for a balanced approach to bail applications. It acknowledged the completion of the investigation and filing of the charge sheet but also noted the prolonged incarceration of Gupta and the likelihood of a protracted trial.

Implications: The grant of bail by the Rajasthan High Court in the GST scam case signifies a cautious approach, balancing the interests of justice with individual rights. While Gupta’s release on bail reflects concerns about prolonged pretrial detention, it does not absolve him of accountability. The decision underscores the importance of due process and the presumption of innocence until proven guilty.

Moving forward, the case is likely to undergo rigorous trial proceedings, with both prosecution and defense presenting their evidence and arguments. The outcome will have significant ramifications for GST enforcement and the deterrence of financial crimes. It highlights the challenges faced by authorities in combating sophisticated schemes aimed at defrauding the government and the imperative of robust legal mechanisms to address such offenses.

Conclusion: The Rajasthan High Court’s decision to grant bail in the ₹21.16 crore GST scam case underscores the complexities of financial crime investigations and legal proceedings. While providing temporary relief to the accused, it reflects the judiciary’s commitment to upholding individual rights and ensuring fair trial procedures. As the case progresses, further insights will emerge, shaping the landscape of GST enforcement and accountability for fraudulent practices in taxation.

FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT

Instant application has been preferred under Section 439 of Code of Criminal Procedure, 1973 for grant of regular bail to the petitioner, namely Vineet Gupta in connection with Case bearing No. DGGI/INV/GST/1033/2023-Gr.-B-O/o ADG-DGGI-JZU, Jaipur for the offences punishable under Sections 132 (1) (b) (c) & (f) r/w Section 132 (5) of the Central Goods & Services Tax Act, 2017.

Submissions of learned counsel appearing for the accused-petitioner are that the petitioner has falsely been implicated in this case only on the basis of statements of the accused, namely Nikunj Singhal & Lakshay Agarwal, who stated that the fake invoices were obtained from the petitioner & from Amit Jain and they are also managing their cash by way of these fake invoices without supplying of the goods. Nothing has been recovered from the petitioner and initially, he was not even named as an accused. The investigation in the main case is over in respect to the other accused-persons, namely Nikunj Singhal & Lakshya Agarwal, the criminal complaint has already been filed against them and they have been released on bail. The petitioner is behind the bars since 17.03.2023. The trial of the case will take a long time. Therefore, looking to the facts & circumstances of the present case, the bail application of the petitioner may be granted and he be enlarged on bail.

During the course of arguments, in support of his submissions, learned counsel appearing for the accused-petitioner, has placed reliance upon the following judgments:- (I) Ratnambar Kaushik Vs. Union of India (2023) 2 SCC 621 (II) Lakshya Agarwal Vs. DGGI Jaipur Zonal Unit, Jaipur & another, SB CRLMB No.20392/2021 dt.08.03.2022 RHCB Jaipur and (III) Nikunj Singhal Vs. DGGI Jaipur Zonal Unit, Jaipur, SB CRLMB No.4080/2022 dt.15.03.2022 RHCB Jaipur.

Per-contra, submissions of learned Senior Standing Counsel appearing for the CGST Department/respondent, are that the petitioner is a key conspirator in a racket of fraudulent availment of Input Tax Credit without any actual supply of goods. He was involved in operation of 08 fake firms and passed on ineligible ITC of Rs. 21.16 crores without supply of goods. The investigation in relation to the 46 firms is presently underway. Therefore, looking to the above facts, the bail application of the petitioner may be dismissed.

During the course of arguments, in support of his submissions, learned Senior Standing Counsel appearing for the CGST Department/respondent, has placed reliance upon the following judgments:- (I) Basudev Mittal Vs. Union of India, Special Leave to Appeal (CRL) No.8128/2022 dt.12.12.2022 SC, (II) Sumit Dutta Vs. Union of India, SB CRLMB No.5371/2021 dt.20.04.2021 RHCB Jaipur and (iii) Mohammed Yunus Vs. State of Rajasthan, SB CRLMB No.15702/2019 dt.16.12.2019 RHC.

Heard learned counsel appearing for the accused-petitioner as well as learned Senior Standing Counsel appearing for the CGST Department/respondent. Perused the material made available on record as well as the judgments cited herein-above by learned counsel for both the parties.

Initially, the present petitioner was never named as an accused. The petitioner has been implicated in this case only on the statements of accused, namely Nikunj Singhal & Lakshya Agarwal. The petitioner is behind the bars since 17.03.2023. Nothing has been recovered from the petitioner. The trial of the case will take a long time. The bail application of accused, namely Nikunj Singhal & Lakshya Agarwal under Section 439 of Cr.P.C. have already been granted by the Co-ordinate Bench of this Court vide its order dated 15.03.2022 & 08.03.2022 respectively.

Hon’ble Apex Court in the case of Ratnambar Kaushik (supra), in Para No.8, has held as under :-

“8. In considering the application for bail, it is noted that the petitioner was arrested on 21.07.2022 and while in custody, the investigation has been completed and the charge sheet has been filed. Even if it is taken note that the alleged evasion of tax by the petitioner is to the extent as provided under Section 132(1)(l)(i), the punishment provided is, imprisonment which may extend to 5 years and fine. The petitioner has already undergone incarceration for more than four months and completion of trial, in any event, would take some time. Needless to mention that the petitioner if released on bail, is required to adhere to the conditions to be imposed and diligently participate in the trial. Further, in a case of the present nature, the evidence to be tendered by the respondent would essentially be documentary and electronic. The ocular evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing. Therefore, keeping all these aspects in perspective, in the facts and circumstances of the present case, we find it proper to grant the prayer made by the petitioner.”

Considering the submissions made by learned counsel for the petitioner and taking into consideration overall facts & circumstances of the present case but without expressing any opinion on the merits/demerits of the case, this Court deems it just and proper to enlarge the petitioner on bail.

Accordingly, the bail application under Section 439 of Cr.P.C. is allowed and it is ordered that the accused-petitioner, namely Vineet Gupta son of Shri Mahendra Prakash Gupta shall be enlarged on bail; provided he furnishes a personal bond in the sum of Rs.50,000/- with two sureties of Rs.25,000/- each (out of which one surety shall be resident of Jaipur Metropolitan or Jaipur District) to the satisfaction of the learned trial Judge for his appearance before the Court concerned on all the dates of hearing and as and when called upon to do so.

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