Upendra Badarji Rana VS State of Gujarat

the learned Sessions Court was rejected. Therefore, the applicant has approached this Court for regular bail.

3. The primary allegations against the applicant involve serious economic offenses related to GST evasion. The applicant is accused of creating fake entities and bogus transactions to fraudulently claim input tax credits, causing a significant loss to the exchequer. The prosecution argues that the applicant is part of a larger conspiracy involving multiple entities and individuals, aimed at evading substantial amounts of GST.

4. The applicant contends that he has been falsely implicated and that the charges are based on conjecture and surmise. He asserts that he has cooperated fully with the investigation and that the evidence does not support the allegations made against him. The applicant further argues that being in custody for an extended period is not justified, especially given the nature of the accusations and the stage of the investigation.

5. The applicant emphasizes that bail is a rule and jail is an exception, highlighting the principle that an accused should not be kept in custody unless it is absolutely necessary. He argues that continued detention would be detrimental to his health and personal liberty. The applicant also assures the Court that he will not tamper with the evidence or influence witnesses if released on bail.

6. The prosecution opposes the bail application, citing the seriousness of the offenses and the potential threat to the integrity of the investigation. The prosecution claims that the applicant has deep-rooted connections and significant influence, which could be used to tamper with evidence or intimidate witnesses. They argue that granting bail at this stage would hamper the investigation and could lead to further financial losses.

7. The Court must consider several factors while deciding on the bail application, including the nature and gravity of the offenses, the evidence against the applicant, the possibility of the applicant fleeing from justice, and the potential impact on the investigation. The Court also needs to balance the applicant’s right to personal liberty with the interests of justice and the need to ensure a fair and thorough investigation.

8. The Court takes into account the arguments presented by both sides, the nature of the evidence available, and the stage of the investigation. It must also consider precedents and guidelines laid down by higher courts regarding the grant of bail in cases involving economic offenses and GST evasion.

9. Ultimately, the decision to grant bail will hinge on whether the Court believes that the applicant’s release would jeopardize the ongoing investigation or the trial. The Court must weigh the risk of potential interference with the investigation against the applicant’s right to liberty, keeping in mind the fundamental principles of justice and fairness.

10. This case underscores the challenges in balancing the rights of the accused with the need to safeguard the integrity of the investigation in complex economic offenses. The outcome of the bail application will have significant implications for the applicant and the broader efforts to combat GST evasion and related financial crimes.

applicant, Upendra Rana, has been implicated in a case registered under Sections 132(1)(b) and 132(1)(c) of the Central Goods and Services Tax Act (CGST Act) and Sections 132(1)(b) and 132(1)(c) of the Gujarat Goods and Services Tax Act, 2017 (GST Act). The Directorate General of GST Intelligence, Ahmedabad Zonal Unit, Ahmedabad, initiated the investigation into the matter.

Following specific intelligence received from the Surat office regarding fraudulent transfer of Input Tax Credit (ITC) without actual supply of goods, which led to significant tax evasion, the GST Intelligence officers conducted a search at Upendra Rana’s residential premises. During the search, they seized cash amounting to Rs.64 lakhs along with various incriminating documents, invoices, and bills related to firms such as M/s. V.V. Enterprise, Mehta Enterprise, Shiv Enterprise, Krishna Enterprise, and V.K. Enterprise.

The applicant was subsequently arrested on 24.02.2022 and presented before the Court of the learned Metropolitan Magistrate, where he has since remained in judicial custody. Despite the rejection of his bail application by the Sessions Court on 22.06.2022, the applicant has now filed for regular bail under Section 439 of the Code of Criminal Procedure (CrPC), feeling aggrieved by the decision.

In the hearing before the Court, Mr. Asim Pandya, learned Senior Counsel, along with Mr. Gaurav Vyas, learned counsel, represented the applicant, while Mr. Dhaval Vyas, learned Standing Counsel, appeared for respondent no.2, and Mr. Manan Maheta, learned Additional Public Prosecutor, represented the respondent-State and Department.

The applicant seeks bail based on the argument that he is entitled to it as per the provisions of the CrPC. It is contended that the refusal to grant bail by the lower court was erroneous, and hence, the present application for regular bail is being pursued.

In light of the circumstances and arguments presented, the Court is tasked with determining whether the applicant should be granted regular bail or not, considering the gravity of the allegations against him, the evidence presented, and any mitigating factors in his favor.

The applicant, seeking bail under Section 439 of the Code of Criminal Procedure, is implicated in a case registered by the Directorate General of GST Intelligence, Ahmedabad Zonal Unit, for offenses under the Central Goods and Services Tax Act (CGST Act) and the Gujarat Goods and Services Tax Act (GST Act). The applicant was arrested on 24.02.2022 and remains in judicial custody since. Despite a prior rejection of bail by the Sessions Court, the applicant now seeks bail again, citing dissatisfaction with the previous decision.

In the court proceedings, arguments have been presented by Mr. Asim Pandya, a senior counsel, assisted by Mr. Gaurav Vyas, counsel for the applicant, Mr. Dhaval Vyas, standing counsel for the respondent no.2, and Mr. Manan Maheta, representing the respondent-State and Department.

The case stems from intelligence received by the GST Intelligence Unit regarding fraudulent transfer of Input Tax Credit (ITC) without corresponding goods supply, leading to substantial tax evasion. A search at the applicant’s premises yielded cash, incriminating documents, and invoices related to several non-existent firms. Investigations revealed that the applicant operated 11 non-existent firms, issuing invoices to beneficiaries instructing payment into specific accounts for subsequent cash withdrawal, facilitating fraudulent ITC amounting to Rs.10.20 crores.

Mr. Asim Pandya, representing the applicant, contends that the arrest lacked sufficient grounds and contravened procedural rules, emphasizing the need for recorded reasons for arrest under Section 69. He argues that the reasons provided were unsubstantiated and lacked evidentiary support. Additionally, he highlights the discrepancy between the seized cash amount and the alleged offense magnitude.

The defense refutes the allegations, claiming the applicant’s innocence and disputing the sufficiency of evidence to establish guilt. They contend that the applicant’s arrest was arbitrary and lacked legal basis, urging the court to grant bail.

In essence, the case revolves around allegations of fraudulent practices leading to substantial tax evasion, with the defense asserting procedural irregularities and insufficient evidence against the applicant. The court must weigh these arguments in determining the applicant’s eligibility for bail.

circumstances presented in the application for regular bail filed under Section 439 of the Code of Criminal Procedure, the applicant seeks bail in connection with a case registered with the Directorate General of GST Intelligence, Ahmedabad Zonal Unit. The charges against the applicant relate to offenses under Sections 132(1)(b) and 132(1)(c) of the Central Goods and Services Tax Act (CGST Act) and the Gujarat Goods and Services Tax Act, 2017 (GST Act).

The applicant was arrested on 24th February 2022 and has since been in judicial custody. Their bail application before the Sessions Court was rejected on 22nd June 2022. The complaint against them was filed on 22nd April 2022. Feeling aggrieved by the rejection of bail, the applicant has filed the present application seeking regular bail.

During the court proceedings, arguments were presented by Mr. Asim Pandya, learned Senior Counsel, assisted by Mr. Gaurav Vyas, learned counsel for the applicant, Mr. Dhaval Vyas, learned Standing Counsel for the respondent no.2, and Mr. Manan Maheta, learned APP for the respondent-State and Department.

The crux of the case revolves around the allegation that the applicant was involved in fraudulent transfer of Input Tax Credit (ITC) without actual supply of goods, leading to evasion of a significant amount of tax. It is alleged that the applicant operated non-existing firms and supplied invoices to beneficiaries, instructing them to make payments into specific bank accounts, from which cash was withdrawn without actual supply of goods.

Mr. Asim Pandya, representing the applicant, raised several contentions:

1. The arrest of the applicant is alleged to be in contravention of mandatory provisions and rules, with insufficient reasons provided for the arrest.

2. The applicant is willing to deposit 10% of the seized cash amount within four months from release, and will file an undertaking to this effect.

3. The investigation concerning the applicant is purportedly complete, with necessary documents seized and in possession of the department, rendering further custody unnecessary.

4. The applicant is a permanent resident of Ahmedabad with roots in society, and the offense, punishable by up to five years, is triable by a Magistrate and is compoundable.

5. Considering the pendency of cases in the Metropolitan Magistrate’s court, it is argued that keeping the applicant in custody for an indefinite period would violate their fundamental rights under Article 21 of the Constitution of India.

In light of these contentions and the presented facts and circumstances, the court is tasked with evaluating whether bail should be granted to the applicant.

The applicant, through this petition under Section 439 of the Code of Criminal Procedure, seeks regular bail in connection with a case registered with the Directorate General of GST Intelligence, Ahmedabad Zonal Unit, under various sections of the Central Goods and Services Tax Act (CGST Act) and Gujarat Goods and Services Tax Act (GST Act). The applicant, Upendra Rana, was arrested on 24th February 2022 and has been in judicial custody since then. Despite a previous bail application being rejected by the Sessions Court on 22nd June 2022, the applicant now seeks bail from this court.

The court has heard arguments from both the applicant’s counsel, Mr. Asim Pandya, assisted by Mr. Gaurav Vyas, and the respondent’s counsel, Mr. Dhaval Vyas, and Mr. Manan Maheta, representing the State and Department respectively.

The facts leading to the filing of this application state that the GST Intelligence received intelligence regarding fraudulent transfer of Input Tax Credit (ITC) without corresponding goods being supplied, resulting in significant tax evasion. Upon searching Upendra Rana’s premises, cash amounting to Rs. 64 lakhs and various incriminating documents were seized. It was discovered that Rana operated 11 non-existing firms, issuing invoices in their names for fraudulent ITC amounting to Rs. 10.20 crores. The authorities allege that Rana was involved in managing cash flow in a fake invoice chain.

The applicant’s counsel argues several points:

1. The arrest lacks sufficient reasons as required by law, and the alleged offenses are based on flimsy grounds.

2. The applicant is willing to deposit 10% of the seized amount within four months of release and provide an undertaking to this effect.

3. The investigation against the applicant is nearly complete, and further custody is unnecessary.

4. The offense is compoundable, and the applicant, being a permanent resident of Ahmedabad, is not a flight risk. Moreover, the trial is likely to take considerable time.

5. Continued detention violates the applicant’s fundamental rights under Article 21 of the Constitution, given the indefinite trial duration.

In response, the respondent’s counsel argues that Rana managed non-existing firms, issuing fake invoices and availing fraudulent ITC, causing substantial losses to the government. They contend that bail could lead to tampering with evidence, as some family members are still evading authorities.

After hearing both sides and examining the evidence, the court must consider the gravity of the economic offense alleged against Rana, as highlighted in the Supreme Court’s judgment in P. Chidambaram Vs. Directorate of Enforcement. The court will need to weigh the risk of evidence tampering against Rana’s rights and the likelihood of a speedy trial.

In conclusion, the court must exercise discretion judiciously in deciding whether to grant bail to the applicant, balancing the interests of justice, the gravity of the alleged offenses, and the rights of the accused.

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