Ajaj Ahamad VS State of Odisha (CGST)

The current petitioner, who has been in custody since January 12, 2021, has submitted a bail application under Section 439 of the Criminal Procedure Code (Cr.P.C.) regarding Case No. 51 of 2020 in the court of the Learned Sub-Divisional Judicial Magistrate (S.D.J.M.), Panposh, Rourkela. This case involves alleged violations of Sections 132(1)(C) and 132(1)(b) of the Central Goods and Services Tax Act, 2017 (referred to as the “CGST Act, 2017”). Prior to this bail application, the petitioner had previously approached the 1st

The present petitioner, detained since January 12, 2021, has filed a bail application under Section 439 of the Cr.P.C. for 2(C)CC Case No.51 of 2020, pending in the court of the Learned S.D.J.M., Panposh, Rourkela, related to offenses under Sections 132(1)(C) and 132(1)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017). This application comes after a previous bail attempt before the 1st Additional Sessions Judge, Rourkela, was denied on July 28, 2021.

In essence, the prosecution accuses the petitioner’s firm, M/S Sony Iron and Steel Trading Co., of fraudulently obtaining Input Tax Credit (ITC) from sham subsidiaries of M/S Pacific Packing Industries. Allegedly, this resulted in the acquisition of ITC benefits amounting to Rs. 5,02,21,055 by the petitioner’s firm and M/S Harihara Enterprises through fake bills without actual goods supply.

Conversely, the petitioner’s counsel contends that the allegations in the prosecution report lack substantial evidence. They argue that while the petitioner’s firm is indeed linked to the alleged transactions, the petitioner is only the proprietor of M/S Sony Iron and Steel Trading Co., whereas M/S Harihara Enterprises is under the proprietorship of Dhanjaya Suna. Thus, they argue that the petitioner cannot be held responsible for the actions attributed to M/S Harihara Enterprises.

This summary outlines the legal context, allegations, and defense arguments pertinent to the bail application filed by the petitioner in a case related to GST offenses.

Petitioner, who has been in custody since January 12, 2021, has filed a bail application under Section 439 of the Criminal Procedure Code (Cr.P.C.) in connection with 2(C)CC Case No.51 of 2020 pending in the court of the Learned S.D.J.M., Panposh, Rourkela, concerning alleged offences under Sections 132(1)(C) and 132(1)(b) of the Central Goods and Services Tax Act, 2017 (referred to as “the CGST Act, 2017”).

Prior to this application, the Petitioner had sought bail from the 1st Additional Sessions Judge, Rourkela, but it was denied on July 28, 2021.

The prosecution alleges that during an investigation into M/S Pacific Packing Industries, it was discovered that the Petitioner’s firm, M/S Sony Iron and Steel Trading Co., fraudulently claimed Input Tax Credit (ITC) from the purported subsidiaries of M/S Pacific Packing Industries. Allegedly, the petitioner’s firm and M/S Harihara Enterprises obtained ITC benefits amounting to Rs. 5,02,21,055 through fake invoices without actual goods being supplied.

In response, the Petitioner’s counsel argues that the allegations are unsubstantiated and lack credible evidence. They assert that while the petitioner is associated with M/S Sony Iron and Steel Trading Co., M/S Harihara Enterprises belongs to someone else entirely. The Petitioner is accused of actions related to M/S Harihara Enterprises based solely on his confession, which, they argue, cannot be used against him. The defense further contends that the investigating officer miscalculated details and overlooked payments made by the Petitioner towards taxes. They emphasize the Petitioner’s cooperation with authorities during the investigation and highlight the adverse impact of his continued detention on his family’s well-being.

The defense also points out that the final charge sheet has been submitted, and documentary evidence has been secured, minimizing the risk of tampering. They argue that given the trial has not yet commenced, and the Petitioner has strong local ties, there is no risk of flight, warranting his release on bail.

In essence, the bail application revolves around the credibility of the prosecution’s evidence and the Petitioner’s cooperation with authorities, emphasizing the need to balance the interests of justice with the Petitioner’s fundamental rights.

The petitioner, currently in custody since January 12, 2021, has filed a bail application under Section 439 of the Cr.P.C. pertaining to a case pending in the court of the Learned S.D.J.M., Panposh, Rourkela, regarding offenses under Sections 132(1)(C) and 132(1)(b) of the Central Goods and Services Tax Act, 2017 (referred to as “the CGST Act, 2017”). Previously, the petitioner’s bail plea before the 1st Additional Sessions Judge, Rourkela, was denied on July 28, 2021.

The prosecution alleges that during an investigation into M/S Pacific Packing Industries, it was discovered that the petitioner’s firm, M/S Sony Iron and Steel Trading Co., was involved in fraudulent Input Tax Credit (ITC) claims from fictitious subsidiaries of M/S Pacific Packing Industries. Allegedly, the petitioner’s firm, along with M/S Harihara Enterprises, acquired ITC benefits worth Rs. 5,02,21,055 through fake invoices without actual goods supply.

In defense, the petitioner’s counsel argues that the prosecution’s allegations lack substantial evidence. It’s contended that while the petitioner is the proprietor of M/S Sony Iron and Steel Trading Co., M/S Harihara Enterprises, implicated in the case, is owned by Dhanjaya Suna. The petitioner’s involvement in the latter company’s actions is solely based on his confession, which legally cannot be used against him. There are also discrepancies in the calculation of misappropriated tax amounts and oversight of tax payments made by the petitioner. Despite cooperating with authorities and appearing multiple times for investigation assistance, the petitioner was arrested on January 12, 2021. His family is facing financial hardship due to his absence, and the final charge sheet has been filed with all documentary evidence secured, minimizing the risk of evidence tampering. Additionally, the petitioner, advised by a doctor, needs to undergo bypass surgery.

After hearing both parties’ counsel and examining the records, the court considers the fundamental principle of bail, as discussed by the Hon’ble Supreme Court in Vaman Narain Ghiya v. State of Rajasthan, emphasizing the importance of liberty.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case law: