While considering a bail application by a Chartered Accountant involved in a GST scam of rupees 98 Crore, a single bench of the Calcutta High Court directed the lower court to allow him to bail if the petitioner approaches the authorities for compounding the offence.
The petitioner, a Chartered Accountant by profession, was arrested along with some other persons under section 69 read with Section 132(1) of the Central Goods and Services Tax Act, 2017 for issuing fake GST invoices. The other accused persons, are Sanjay Kumar Pandit, Nagendra Kumar Dubey alias Sandip Dube, and Mr. Vijay Rajpuriya.
The authorities alleged that the petitioner, along with various other persons, allegedly issued GST Invoices without any supply of the goods or services to anybody on commission basis causing loss of more than 98 crores approximately.
The petitioner, a Chartered Accountant approached the High Court for bail for the second time after the same Court rejected an earlier application.
The petitioners’ request for bail was initially rejected Judicial Magistrate, Alipore.
Before the Court, the petitioner submitted that he is a Chartered Accountant by profession and with the similar contention he has averred that he is no way connected with the instant case. It was also submitted that the petitioner is in custody since 06.6.2019 and his further detention is not warranted as the Charge-sheet has already been submitted on completion of the investigation.
It is also submitted that the petitioner is no way responsible person as no notice was issued under Section 73 of the CGST Act, 2017 and has been falsely entangled in this case as he is neither a proprietor nor a person responsible for the running of any proprietary business.
Justice Shivakant Prasad referred the Apex Court decision in P.V. Ramanna Reddy vs. Union of India wherein the Supreme Court held that though Section 69(1) of CGST, 2017 confers power upon the Commissioner to order arrest of a person for cognizable and non-bailable offence does not contain safeguard incorporated in Section 41 and 41A of the Code of Criminal Procedure, 1973 in view of provision of Section 70(1) of the said Act same must be kept in mind before arresting a person.
“However, Section 41A(3) of the Code of Criminal Procedure does not provide an absolute irrevocable guarantee against arrest, while turning down the prayer for release of the petitioner on bail and thereby held that petitioner would not be entitled to be enlarged on bail but gave him the liberty to approach the authority for compounding of the offence under Section 138 of CGST Act. I once again reiterate and record that the petitioner may be released on bail by the learned Trial Court if he finds that he has approached the authority for compounding of the offence on deposit of at least 20% of the evaded amount on account of CGST,” the Court said.