Balwinder Singh VS State Tax Officer

Through this petition, the petitioner is seeking regular bail in a case registered under Sections 69, 132(1)(a)(b)(c) of the Punjab Goods and Service Tax Act, 2017. The case was filed at the Police Station Punjab GST Mobile Wing, Chandigarh-2, at Shambhu, and is currently pending before the Sub Divisional Judicial Magistrate, Amloh.

The allegations in the complaint accuse the petitioner and co-accused of participating in a scheme to evade State Tax, thereby causing a loss of approximately Rs. 8.95 crore to the State Government. It is alleged that they achieved this by establishing bogus firms and falsifying billings and transactions to fraudulently claim GST refunds.

The petitioner, through their counsel, argues that…

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for the petitioner argued several key points in the plea for regular bail amidst a complex legal backdrop. The petitioner’s case arises from a complaint under various sections of the Punjab Goods and Service Act, 2017, alleging substantial tax evasion resulting in a significant loss to the state exchequer. Specifically, the petitioner and co-accused are accused of creating bogus firms, engaging in fake transactions, and thereby causing a financial loss estimated at Rs. 8.95 crore to the State Government.

The defense, presented by the petitioner’s counsel, revolves around disassociating the petitioner from the alleged offenses. It was asserted that the petitioner had established a firm named M/s Suvidha Enterprises and obtained a GST number, but the operational activities were managed by Prince Dhiman, who is related to the petitioner through familial ties. The petitioner claimed ignorance of the business transactions conducted under the firm’s name, arguing that Prince Dhiman solely handled all dealings recorded on the online portal with the respondent department. The defense further contended that the petitioner neither participated in nor benefited from any fraudulent activities attributed to the firm.

Legal arguments supporting the bail plea included challenges to the constitutional validity of relevant sections under the Central Goods and Service Tax Act, citing ongoing litigation (CWP No. 8004 of 2020) questioning the legality of the provisions. It was emphasized that the arrest under the Punjab Goods and Service Tax Act was allegedly conducted without jurisdiction, further complicating the grounds for the petitioner’s continued detention. The petitioner had been in custody for over 10 months, with the defense asserting that his presence was no longer necessary for investigation purposes.

Additionally, the defense highlighted the documentary nature of the evidence relied upon in the case, suggesting that the petitioner’s detention served no practical investigative purpose. The cumulative arguments sought to persuade the court that the petitioner should be granted bail, emphasizing his lack of direct involvement in the purported offenses and the legal ambiguities surrounding the case.

In conclusion, the petitioner’s plea for regular bail underscored a robust defense strategy challenging both the factual basis of the allegations and the procedural legitimacy of the arrest under the pertinent tax legislation. The outcome of this legal battle would hinge on the court’s assessment of the evidence presented and the application of relevant legal principles concerning bail in such complex financial cases.

through the detailed arguments presented in the petition for regular bail filed by the petitioner in a case under Sections 69 and 132(1)(a)(b)(c) of the Punjab Goods and Service Tax Act, 2017. The case was registered at Police Station Punjab GST Mobile Wing, Chandigarh-2, at Shambhu, and is pending before the Sub Divisional Judicial Magistrate, Amloh.

The petitioner, along with co-accused, is accused of committing tax evasion amounting to Rs. 8.95 crore by allegedly creating bogus firms, issuing fake bills, and manipulating transactions to claim GST refunds unlawfully, thereby causing significant financial loss to the State Government.

The petitioner’s counsel argued vehemently that the petitioner was wrongly implicated, emphasizing that the email and phone number linked to the alleged offenses did not belong to him. They contended that although the petitioner had registered a firm, M/s Suvidha Enterprises, and obtained a GST number, the business activities were managed by his nephew, Prince Dhiman, without his knowledge or involvement. It was stressed that the petitioner had no role in the purported illegal activities and should be granted bail accordingly.

Furthermore, the defense challenged the legality of Sections 69 and 132 of the CGST Act, 2017, citing a pending case (CWP No. 8004 of 2020) challenging these sections’ validity. They argued that the arrest under the Punjab GST Act was without jurisdiction and highlighted the petitioner’s prolonged detention exceeding 10 months without any ongoing investigative necessity.

In support of their plea for bail, the petitioner’s counsel referenced judicial precedents and previous court orders that favored bail in similar circumstances, including orders from the High Court and Supreme Court.

On the opposing side, the State counsel countered that the petitioner and his co-accused orchestrated a sophisticated scheme involving multiple firms across various states to evade taxes through fraudulent means. They emphasized that the offenses were premeditated for personal gain and involved a deliberate attempt to deceive the government, as evidenced by the interlinking of numerous bogus firms.

The State argued that the allegations against the petitioner were grave and substantiated with documentary evidence, suggesting a strong likelihood of tampering with evidence if granted bail. They pointed to legal precedents, including the Supreme Court’s stance on economic offenses, to support their contention that the seriousness of the charges warranted denying bail.

After hearing arguments from both sides, the court was left to weigh the complexities of the case, the nature of the allegations, and the arguments pertaining to the petitioner’s culpability and flight risk. The decision on whether to grant bail would hinge on a balancing act between the principles of justice and the need to ensure the integrity of the judicial process and prevent potential obstruction of justice.

In the present case, the petitioner has filed a petition seeking regular bail in relation to a complaint registered under Sections 69, 132(1)(a), (b), and (c) of the Punjab Goods and Services Tax Act, 2017. The complaint alleges that the petitioner, along with co-accused individuals, engaged in tax evasion amounting to Rs. 8.95 crore by operating bogus firms and conducting fraudulent transactions to claim GST refunds, thereby causing significant financial loss to the State Government.

The petitioner, through their counsel, argues that they have been falsely implicated. They claim that while they established a firm named M/s Suvidha Enterprises and obtained a GST number, the business operations were handled solely by Prince Dhiman, who is related to the petitioner by marriage and adoption. The petitioner asserts they were unaware of any illegal activities associated with the firm and had no involvement in its transactions recorded on the online portal of the respondent-department. Based on these grounds, the petitioner seeks bail.

Additionally, the petitioner’s counsel challenges the validity of Sections 69 and 132 of the Central Goods and Services Tax Act, 2017, citing a pending case before the court regarding their constitutionality. They argue that the arrest under the Punjab Goods and Services Tax Act, 2017, was jurisdictionally improper. It is also emphasized that the petitioner has been in custody for over 10 months without further investigative necessity.

On the contrary, the State counsel contends that the petitioner and their associates orchestrated a sophisticated tax evasion scheme, involving multiple firms and significant sums, demonstrating a deliberate intent to defraud the government. The State alleges a nexus of over 30 firms across several states connected to the petitioner and the co-accused, with shared contact details, which further implicates them in fraudulent activities.

The State further argues that the seriousness of the allegations, the substantial financial loss to the government, and the potential for tampering with evidence necessitate denying bail to the petitioner. Reference is made to legal precedents emphasizing the risk of releasing individuals accused of economic offenses.

After hearing arguments from both sides and considering relevant legal precedents, the court decides to grant bail to the petitioner. The decision is based on the view that continuing to detain the petitioner serves no purpose, pending trial proceedings that are expected to be protracted. The court orders the petitioner to furnish a bail bond of Rs. 5 lakh along with surety, surrender any passport, and obtain court permission before leaving the country.

Importantly, the court clarifies that granting bail does not imply a judgment on the merits of the case itself. The decision primarily addresses the appropriateness of continued pretrial detention in this specific instance.

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