Saurabh Jindal VS Union of India

In a case concerning the Intelligence, Jaipur Zonal Unit, and involving alleged offences under Sections 132 (1) (c) (f) (h) & (1) of the Central Goods & Services Tax Act, 2017, the petitioners have sought bail. Their counsel has argued that the petitioners have been wrongfully implicated and have been detained since September 14, 2022. The main arguments presented by the petitioners’ counsel are as follows:

1. False Implication and Detention: The petitioners claim they have been falsely implicated and are unjustly imprisoned since September 14, 2022.

2. Complaint Filed: A formal complaint has been lodged against the petitioners.

3. No Creation of Fake Firms: The petitioners assert that they did not create any fake firms. The main accused, Dipanshu Gupta, who had actually availed the input tax credit, has already been granted bail by a Coordinate Bench of the court.

4. Nature of Offence: The offences charged are triable by a Magistrate, compoundable, and carry a maximum punishment of five years. Given the nature of these offences, the trial’s conclusion may take a considerable amount of time.

5. No Show Cause Notices: The petitioners argue that they were not issued any show cause notices, suggesting procedural lapses in their arrest and detention.

To support their bail application, the petitioners’ counsel has cited several judgments:

1. Ratnambar Kaushik vs. Union Of India (Special Leave to Appeal (Crl.) No.10319/2022, decided on December 5, 2022)

2. Dananjay Singh vs. Union Of India (S. B. Criminal Miscellaneous Bail Application No.18825/2021, decided on February 5, 2022)

3. Suresh Jajra vs. Union Of India (S. B. Criminal Miscellaneous Bail Application No.11477/2022, decided on August 4, 2022)

4. Kamal Chand Bothra vs. Union Of India (S. B. Criminal Miscellaneous Bail Application No.8954/2022, decided on July 1, 2022)

5. Hardeep Singh Banga vs. State Of U. P.

These precedents are presented to argue that the petitioners should be granted bail, emphasizing that similar cases have resulted in bail for the accused and highlighting procedural issues and the potential for extended trial durations.

In the case presented before the Intelligence, Jaipur Zonal Unit, Jaipur, the petitioners are charged with offences under Sections 132(1)(c), (f), (h), and (1) of the Central Goods & Services Tax Act, 2017. Their counsel argues that the petitioners are wrongfully accused and have been detained since September 14, 2022. They claim that the main accused, Dipanshu Gupta, who benefitted from the input tax credit, was granted bail by a co-ordinate bench of the court. The petitioners maintain they did not create fake firms and argue that the charges against them are minor, triable by a Magistrate, compoundable, and carry a maximum penalty of five years. Given the lengthy trial process and the absence of show-cause notices, they seek bail.

The petitioners’ counsel cites several judgments to support their bail application, including:

1. Ratnambar Kaushik vs. Union of India (SLP Crl. No.10319/2022)

2. Dananjay Singh vs. Union of India (S.B. Criminal Miscellaneous Bail Application No.18825/2021)

3. Suresh Jajra vs. Union of India (S.B. Criminal Miscellaneous Bail Application No.11477/2022)

4. Kamal Chand Bothra vs. Union of India (S.B. Criminal Miscellaneous Bail Application No.8954/2022)

5. Hardeep Singh Banga vs. State of U.P. ([2021] 131 taxmann.com 54)

6. Hanumanthappa Pathrera Lakshmana vs. State ([2020] 117 taxmann.com 280)

7. Ritik Arora vs. Union of India ([2022] 145 taxmann.com 59)

8. Mahendra Kumar Singhi vs. Commissioner of Commercial Taxes, Karnataka ([2019] 106 taxmann.com 358).

Conversely, the respondent’s counsel opposes the bail, stating the petitioners, as directors and proprietors of Krishna Metallurgical Pvt. Ltd. and M/s Grand Design, are responsible for substantial tax evasion amounting to Rs.11.30 Crores in input tax credit. They argue that the case of Dipanshu Gupta differs since he only received a commission. The respondent suggests that if the court directs the petitioners to deposit the input tax credit loss of Rs.11.30 Crores, they would not object to granting bail. Otherwise, they request the bail application to be dismissed.

The respondent’s counsel also references pertinent judgments:

1. Mahipal vs. Rajesh Kumar @ Polia & Anr. (2019 [8] Supreme 732)

2. Vinay Kant Ameta vs. Union of India (Criminal Appeal No.60/2022 @ SLP [CRL.] No.9564/2021)

3. Ratnambar Kaushik vs. Union of India.

The petitioners have been charged under Sections 132 (1) (c), (f), (h), and (l) of the Central Goods & Services Tax (CGST) Act, 2017. They are accused of being involved in tax evasion and availing fraudulent input tax credit. They have been in custody since September 14, 2022. Their counsel argues that they are falsely implicated, that they did not create fake firms, and that the main accused, Dipanshu Gupta, who availed the input tax credit, has already been granted bail. The counsel also contends that the offense is triable by a Magistrate, is compoundable, and carries a maximum punishment of five years, suggesting that the trial’s conclusion could take a long time. Additionally, no show cause notices were issued to the petitioners.

The petitioners’ counsel relies on several judgments to support their bail plea, including cases such as Ratnambar Kaushik v. Union of India and Dananjay Singh v. Union of India. These cases typically involve similar charges and have seen the accused being granted bail under comparable circumstances.

The respondent’s counsel opposes the bail application, arguing that the petitioners, as Director and Proprietor of Krishna Metallurgical Pvt. Ltd. and M/s Grand Design in New Delhi, are directly responsible for the tax evasion amounting to Rs.11.30 crores. The respondent’s counsel distinguishes the petitioners’ case from that of Dipanshu Gupta, stating that Gupta was only a commission agent, whereas the petitioners are the primary beneficiaries of the fraudulent input tax credit. The respondent suggests that the petitioners be required to deposit the Rs.11.30 crores they allegedly evaded to be considered for bail, referencing a precedent where the Apex Court directed Vinay Kant Ameta to deposit Rs.200 crores as a condition for bail.

After considering the arguments from both sides, the court acknowledges the tax evasion and the fraudulent benefit of Rs.11.30 crores availed by the petitioners. The court references the Supreme Court’s decision in Vinay Kant Ameta’s case, which involved a similar situation, to highlight the seriousness of the offense. Despite this, the court decides, considering all circumstances and without making any judgment on the case’s merits, that it is appropriate to grant bail to the petitioners.