Sunil Mahlawat VS Central Goods and Services Tax

The petitioner in this case has filed a petition under Section 439 of the Criminal Procedure Code (Cr.P.C.) seeking regular bail. The case against the petitioner pertains to a registration under Section 132(1)(i) read with various subsections of the Central Goods and Services Tax Act, 2017.

According to the petitioner’s senior counsel, the allegations against the petitioner are that, as a registered Chartered Accountant, they shared their One Time Password with co-accused Gaurav Dhir. This led to the generation of a Unique Document Identification Number, which was then used by Dhir to issue a CA certificate without the petitioner’s knowledge or authorization. The counsel further argues that the document in question was signed by the co-accused and not by the petitioner, indicating the petitioner’s lack of direct involvement. It’s also claimed that this was a one-time occurrence of sharing such information with the co-accused.

Despite the petitioner voluntarily joining the investigation upon receiving summons on 17th May 2022, they were arrested immediately. Subsequently, they were sent to judicial remand, without any request for police remand from the respondent-Department.

The counsel contends that the entire investigation seems to lack substantial grounds for the petitioner’s continued detention. They highlight the absence of any prior criminal record or evidence suggesting the petitioner’s involvement beyond the single instance of sharing the One Time Password.

In light of these arguments, the petitioner seeks regular bail, asserting their innocence and lack of complicity in the alleged offense.

The case at hand involves a petition filed under Section 439 of the Criminal Procedure Code (Cr.P.C.) seeking regular bail for the petitioner, who is implicated in a case registered under Section 132(1)(i) read with various subsections of the Central Goods and Services Tax Act, 2017.

The petitioner, represented by learned senior counsel, asserts that the allegations against them involve sharing a One Time Password (OTP) with a co-accused, which was subsequently used to generate a Unique Document Identification Number for the issuance of a Chartered Accountant (CA) certificate without the petitioner’s knowledge or authorization. It is emphasized that this instance was an isolated occurrence and the petitioner cooperated with the investigation upon being summoned but was arrested immediately. Despite being in custody since May 17, 2022, it’s highlighted that the investigation has concluded, the charge sheet has been filed, and there has been no attempt to seek police remand. Moreover, it’s noted that there is no evidence implicating the petitioner in benefiting from the alleged offense, as the excess Input Tax Credit was directed to the co-accused, with whom the petitioner has no financial involvement. The defense further draws attention to a precedent where bail was granted in a similar case.

On the contrary, counsel for the respondent-Department opposes bail, citing the significant loss suffered by the department and ongoing efforts to identify all involved parties. However, it’s acknowledged that certain bank accounts linked to the case have been frozen and some companies have refunded the disputed amounts voluntarily. Despite this, the petitioner has remained in custody for an extended period, and the trial is yet to commence.

In support of their arguments, both sides reference relevant legal precedents. The defense highlights a previous case where bail was granted under similar circumstances, while the prosecution emphasizes the seriousness of the allegations and the department’s ongoing efforts to pursue justice.

Overall, the petition raises complex legal and factual issues regarding the petitioner’s alleged involvement in a financial offense under the GST Act, weighing the petitioner’s right to liberty against the interests of justice and the integrity of the tax system.

The current petition seeks bail under Section 439 Cr.P.C. for the petitioner in a case registered under Section 132(1)(i) read with several subsections of Section 132(1) of the Central Goods and Services Tax Act, 2017. The petitioner, a registered Chartered Accountant, allegedly shared his One Time Password with a co-accused, resulting in the generation of a Unique Document Identification Number. This number was then used to issue a CA certificate without the petitioner’s knowledge or authority. The petitioner contends that this was a one-time occurrence and cooperated with the investigation upon being summoned but was arrested immediately. The defense argues that the investigation is complete, the challan has been presented, and there is no recovery to be made from the petitioner. Additionally, the petitioner is not alleged to have benefitted from any wrongdoing and has no involvement in other cases.

In opposition, the respondent-Department highlights the significant loss to the department and ongoing efforts to identify all involved parties. However, certain bank accounts have been frozen, and some companies have refunded amounts owed. The defense acknowledges the petitioner’s prolonged custody since the arrest, the completion of the investigation, and the pending trial with 21 prosecution witnesses.

Both sides cite relevant case law, including Supreme Court judgments emphasizing the presumption of bail over custody, especially considering completed investigations and filed charge sheets. The courts stress the need to balance the severity of the offense with the principle of granting bail to ensure fair trials.

Ultimately, the court must weigh the gravity of the alleged offense against the petitioner’s right to bail, considering the facts and circumstances of the case.

The current petition under Section 439 Cr.P.C. seeks regular bail for the petitioner in a case registered under Section 132(1)(i) read with Section 132(1)(b)(c)(e)(f) of the Central Goods and Services Tax Act, 2017. The petitioner, a registered Chartered Accountant, allegedly shared his One Time Password with a co-accused, leading to the generation of a Unique Document Identification Number used to issue a CA certificate without the petitioner’s knowledge or authority. The petitioner’s defense asserts this as a one-time occurrence, and he cooperated with the investigation upon summons but was arrested immediately without a request for police remand. The investigation is complete, the challan presented, and there are no recovery claims against the petitioner. Despite being in custody since his arrest, with 21 prosecution witnesses listed, the trial is yet to begin. The petitioner is not accused of benefiting from any alleged wrongdoing related to excess Input Tax Credit.

In opposition, the respondent argues the significant loss incurred by the department, despite freezing certain bank accounts and some companies voluntarily refunding amounts. The department is still identifying involved parties and has initiated proceedings against certain officials. However, they acknowledge the petitioner’s extended custody, completed investigation, presented challan, and pending trial.

Legal arguments reference Supreme Court judgments emphasizing bail as a rule, not an exception, to ensure fair trials. The gravity of economic offenses is acknowledged, but bail considerations should be case-specific, balancing personal liberty with the government’s interest in preventing crime. There is no fixed formula for granting bail, and each case’s facts and circumstances must be weighed carefully.

Ultimately, the decision rests on the court’s assessment of these factors, ensuring procedural fairness and upholding the right to personal liberty under Article 21 of the Constitution.

The petitioner has filed a petition under Section 439 Cr.P.C. seeking regular bail in a case registered under various sections of the Central Goods and Services Tax Act, 2017. The allegations against the petitioner, a registered Chartered Accountant, involve sharing One Time Passwords with a co-accused, resulting in the unauthorized issuance of a CA certificate. The petitioner claims innocence, stating it was a one-time occurrence without his knowledge. Despite cooperating with the investigation upon summons, he was arrested and has been in custody since May 17, 2022.

The defense highlights that the investigation is complete, the challan has been presented, and there is no evidence of recovery from the petitioner. Furthermore, there are 21 prosecution witnesses, all department officials, and the trial, being magisterial, may take time to conclude. It’s emphasized that the petitioner is not the beneficiary of the alleged offense and has no involvement in other cases. Some bank accounts related to the case have already been frozen, supporting the argument for bail.

On the contrary, the respondent-Department argues against bail, citing the magnitude of loss to the department and ongoing efforts to identify all involved parties. However, they cannot refute the petitioner’s prolonged custody, completed investigation, and pending trial.

In considering the petition, reference is made to Supreme Court judgments emphasizing the importance of balancing the accused’s right to bail with the gravity of the offense. While economic offenses are serious, bail is the rule, and refusal should be the exception, ensuring fair trial opportunities. The gravity of the offense and potential societal consequences are factors to consider, along with the term of the sentence prescribed.

Various case judgments are examined, but none directly support the respondent’s argument against bail. The petitioner’s situation is distinguished from cases where bail was denied due to ongoing investigations or the seriousness of the offense.

In conclusion, the court must weigh the circumstances of the case, ensuring procedural fairness while upholding the petitioner’s right to liberty. The petitioner seeks regular bail under Section 439 Cr.P.C. in a case under the CGST Act, 2017. Allegedly, the petitioner, a registered Chartered Accountant, shared his OTP with a co-accused for generating a Unique Document Identification Number without his knowledge. The investigation is complete, with 21 prosecution witnesses, and no recovery is required from the petitioner. The defense cites precedents where bail was granted in similar cases. The prosecution argues the gravity of the offense and ongoing investigations. However, considering completed investigation, the petitioner’s custody since 17.5.2022, and absence of recovery, the court grants bail. Referring to relevant judgments, the court emphasizes bail as a rule, subject to stringent conditions to ensure trial attendance and evidence preservation. The petitioner is released on bail upon furnishing Rs.10 lakhs bail/surety bonds and complying with specified conditions.

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