Kamal VS State of Haryana

a group of individuals including Kamal, Sant Kumar, and Shobhgaya were seeking regular bail in connection with a case filed against them at the Bhuna Police Station in Fatehabad district. The case, registered under Sections 420, 467, 468, 471, and 120B of the Indian Penal Code, stemmed from an FIR dated January 9th/10th, 2019. The complaint leading to the FIR was filed by Sh. Sanjay Khichar, an ETO-cum-State GST Officer, regarding the allegedly fraudulent activities of a firm named ‘M/s Paradise International’.

According to the complaint, ‘M/s Paradise International’, purportedly owned by David Masih, was registered under the GST Act in August 2018 but was found to be non-existent upon investigation. The firm was accused of issuing 89 bills amounting to Rs. 1,28,82,326/- and falsely claiming input tax credit of Rs. 1,28,82,326/-, leading to a substantial loss to the state exchequer. It was revealed that the firm operated only on paper and did not have a physical presence at its registered address.

David Masih, initially arrested on December 14, 2020, allegedly confessed during interrogation that he collaborated with

argued that the seriousness of the allegations, including charges under Sections 420 (cheating), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record), and 120B (criminal conspiracy) of the Indian Penal Code, warranted denial of bail to the petitioners. The State counsel emphasized that the investigation had uncovered substantial evidence linking the petitioners to the creation of a fictitious firm, ‘M/s Paradise International’, which purportedly conducted fraudulent transactions amounting to Rs. 1,28,82,326/- and claimed false input tax credits of Rs. 1,28,82,326/-, ultimately resulting in a substantial loss of approximately Rs. 1.80 crores to the State exchequer.

In response, the counsel representing the petitioners contended that their clients had been wrongly implicated and pointed out the bail granted to co-accused David Masih, stressing parity in treatment. They argued that there was no concrete evidence directly linking their clients to the alleged offenses, maintaining their innocence throughout.

After considering the arguments from both sides and reviewing the contentions along with the filed reply, the court proceeded to dispose of the bail petitions filed by Kamal, Sant Kumar, and Shobhgaya. The court’s decision was not explicitly stated in the provided text, but it typically involves a careful consideration of the merits of the case, the nature of the charges, the evidence presented, and the arguments for and against granting bail.

petitioners Sant Kumar and Shobhgaya, are also involved in 3 other identical cases. It has also been informed that the petitioners, as on date, have been behind bars since the last about 10 months and that as on date 6 out of the cited 28 PWs already stand examined.

Upon thorough consideration of the arguments presented, the court ordered to dispose of the two petitions filed on behalf of Kamal, Sant Kumar, and Shobhgaya seeking regular bail. The case pertains to FIR No.15 dated 9th/10th January 2019, registered at Police Station Bhuna, District Fatehabad, under Sections 420, 467, 468, 471, and 120B of the Indian Penal Code.

The FIR was initiated based on a complaint by Sh. Sanjay Khichar, ETO-cum-State GST Officer, alleging the operation of a fictitious entity, ‘M/s Paradise International’, which purportedly raised fraudulent invoices amounting to Rs. 1,28,82,326/- and falsely claimed input tax credit of Rs. 1,20,75,425/-. Investigations revealed that the firm did not exist at its registered address and was merely a paper entity.

During investigation, David Masih, initially arrested on 14th December 2020, implicated the petitioners by alleging their involvement in creating the fraudulent firm and using his personal documents for its registration. The prosecution argued that the petitioners habitually engaged in such activities, causing significant financial loss to the state.

In response, the petitioners’ counsel contended that their clients were falsely implicated and cited bail granted to co-accused David Masih as grounds for parity. The State, however, asserted that sufficient evidence had been gathered to substantiate the involvement of the petitioners in multiple fraudulent schemes, emphasizing their habitual offender status.

After considering these submissions, the court acknowledged the serious nature of the allegations, noting the substantial loss to the exchequer amounting to approximately Rs. 1.80 crores. It highlighted specific instances where the petitioners were implicated, including the fabrication of documents and establishment of fictitious businesses.

Consequently, taking into account the gravity of the charges, the court denied bail to Kamal, Sant Kumar, and Shobhgaya, emphasizing the substantial evidence against them and their alleged habitual involvement in similar offenses. Thus, the petitions for bail were dismissed, and the proceedings in the case continued.

In the matter at hand, the High Court rendered a comprehensive decision concerning two bail petitions filed on behalf of Kamal, Sant Kumar, and Shobhgaya, who were accused in a case registered under various sections of the Indian Penal Code at Police Station Bhuna, Fatehabad. The case stemmed from allegations surrounding a fictitious entity named ‘M/s Paradise International’ that purportedly engaged in fraudulent activities, including issuing bogus bills and claiming substantial input tax credit, thereby causing an estimated loss of approximately Rs. 1.80 crores to the state exchequer.

The complaint leading to the FIR was filed by Sh. Sanjay Khichar, ETO-cum-State GST Officer, Fatehabad, highlighting discrepancies related to the non-existent nature of ‘M/s Paradise International’ despite its registration under GST laws. During investigation, it was revealed that the accused, including the petitioners, had orchestrated a scheme involving multiple bogus firms and fabricated transactions to exploit tax regulations for financial gain.

Key details emerged during the investigation, such as Kamal’s involvement in falsifying documents like rent deeds and acquiring personal identification details from co-accused David Masih. Moreover, Shobhgaya’s connection to the fraudulent firms was underscored by his telephone number and email ID being linked to the bogus registrations. Further complicating matters, Sant Kumar, who is Shobhgaya’s father, was implicated in multiple similar cases involving financial fraud.

During the bail hearing, the petitioners’ counsel argued against their involvement and cited the precedent of bail granted to co-accused David Masih. In contrast, the State counsel presented evidence indicating the petitioners’ habitual involvement in similar fraudulent activities and the substantial economic harm caused thereby.

After considering both sides’ submissions, the High Court concluded that given the gravity of the allegations, the substantial loss inflicted on the state exchequer, and the petitioners’ track record as repeat offenders, bail was denied. The Court emphasized the need for expeditious trial proceedings, directing the Trial Court to prioritize witness examination to facilitate a swift conclusion of the case.

In summary, the High Court’s decision underscored the seriousness of economic offenses, highlighting the significant loss caused by the alleged fraudulent activities of the petitioners. The ruling also emphasized the importance of a diligent trial process while leaving open the possibility for the petitioners to reapply for bail if trial delays become unreasonable. Thus, the petitions for bail were dismissed, reaffirming the Court’s commitment to justice and deterrence against economic crimes.

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