Azhar Ali P U and Rinshad M A v. State of Kerala and State Tax Officer (Investigation Branch), Kerala State Goods and Services Tax Department, Kottayam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE K. BABU** **FRIDAY, THE 25[TH] DAY OF NOVEMBER 2022 / 4TH AGRAHAYANA, 1944** **BAIL APPL. NO. 9502 OF 2022** **FILE NO. NO.GST/IBK/IA/INS-14/2021-2022 OF THE OFFICE OF THE STATE TAX OFFICER (INVESTIGATION BRANCH), KERALA STATE GOODS AND** **SERVICES TAX DEPARTMENT OF KOTTAYAM** ## **PETITIONERS/ACCUSED NOS.1 AND 2:** 1 AZHAR ALI P U, AGED 27 YEARS, S/O. USMAN, PULAVATH, KANDANTHARA, ALLAPRA P.O, VENGOLA, ERNAKULAM, PIN - 683556 2 RINSHAD M A, AGED 29 YEARS, S/O. ABDUL KARIM, MADAVANA HOUSE, PALLIKAVALA, MUDICKAL P.O., PERUMBAVOOR, ERNAKULAM, , PIN - 683547 BY ADVS. RAHUL SASI NEETHU PREM MANU K. MURALI ANAND MAHADEVAN ## **RESPONDENTS/STATE & COMPLAINANT:** 1 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, PIN - 682031 2 STATE TAX OFFICER (INVESTIGATION BRANCH), STATE GOODS AND SERVICE TAX DEPARTMENT, KOTTAYAM, PIN – 686002 REPRESENTED BY ITS AUTHORIZED OFFICER BY ADVS. SRI.M.C ASHI, PP SRI.MUHAMMED RAFIQ,SPL GP ,TAXES THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON 25.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: B.A No.9502 of 2022 2 ## K.BABU, J. -------------------------------------- B.A No.9502 of 2022 --------------------------------------Dated this the 9[th] day of November, 2022 ## O R D E R This is an application filed under Section 439 of the Code of Criminal Procedure. 2. The petitioners are accused Nos.1 and 2 respectively in File No.GST/IBK/IA/INS-14/2021-2022 of the Office of the State Tax Officer (Investigation Branch), Kerala State Goods and Services Tax Department of Kottayam division. The petitioners are alleged to have committed offence under Section 132 (1)(b) and (c) of the CGST/SGST Act, 2017. 3. The prosecution case is that the petitioners obtained fraudulent GST registrations in the name of fictitious firms in Kerala and by fraudulent GST operations caused huge revenue loss. The petitioners have availed bogus Input Tax Credit to the tune of Rs.12,33,09,008/- and they have passed fake Input Tax Credit through GSTR 1 for an amount of Rs.12,58,60,122/-. 4. The petitioners were arrested on 10.11.2022 and produced B.A No.9502 of 2022 3 before the jurisdictional Magistrate. They have been in judicial custody since then. 5. Heard the learned counsel for the petitioners and the learned Special Government Pleader (Taxes). 6. The learned counsel for the petitioners submitted that the petitioners are innocent of the allegations levelled against them. The learned counsel stated that the petitioners were given to the custody of the Investigating Officer from 17.11.2022 to 19.11.2022. The learned counsel further submitted that the investigation is almost in the final stage and further detention of the petitioners is not required. 7. The learned Special Government Pleader (Taxes) opposed the bail plea of the petitioners on the ground that the offence alleged against the petitioners is very grave in nature. The learned Special Government Pleader contended that the yardstick to be applied for the offences under other statutes cannot be made applicable to the economic offences. 8. The learned counsel for the petitioners submitted that the principles underlined in the provisions of Sections 437 and 439 of B.A No.9502 of 2022 4 the Code of Criminal Procedure are to be applied while considering bail in respect of the offence alleged herein especially when the maximum punishment prescribed for the offence alleged is five years. 9. The materials placed before this Court would show that the Investigating Officer had applied for the custody of the petitioners for a period of five days as per Cr.MP No.5436/2022 on 17.11.2022. The jurisdictional Magistrate granted custody of the petitioners to the Investigating Officer for a period of three days. 10. The learned Special Government Pleader (Taxes) contended that further interrogation of the petitioners is required. The learned Special Government Pleader further submitted that if the petitioners are released on bail, there is every possibility that they will tamper with the electronic evidence and influence the persons who are acquainted with the facts of the case. 11. The offence alleged against the petitioners is punishable under Sections 132(1)(b) and (c) of the CGST/SGST Act, 2017 which is punishable with imprisonment for a term which may extend to five years and fine. The petitioners have been in judicial custody since B.A No.9502 of 2022 5 10.11.2022. 12. The principle that bail is the rule and jail is the exception has been well recognised by judicial pronouncements. This is the principle underlined in Article 21 of the Constitution of India. 13. There cannot be an inexorable formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling bail. {Vide: Gurcharan Singh v. State (Delhi Admn.) [(1978) 1 SCC 118] }. 14. The issue of bail is one of liberty, justice, public safety and burden of the public treasury, all of which insist that a developed jurisprudence of bail is integral to a socially sensitised judicial process. Personal liberty, deprived when bail is refused, is too precious a value of our constitutional system recognised under Article 21 that the curial power to negate it is a great trust exercisable, not casually but judicially, with lively concern for the cost to the individual and the community. After all, personal liberty of an accused or convict is fundamental, suffering lawful eclipse only in terms of “procedure established by law” {Vide: Gudikanti Narasimhulu v. State [(1978) 1 SCC 240] }. B.A No.9502 of 2022 6 15. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty {Vide: Sanjay Chandra v. CBI [(2012) 1 SCC 40] }. 16. Having regard to the tenure of judicial custody undergone by the petitioners and the further fact that the petitioners were given to the custody of the Investigating Officer for interrogation, I am of the view that the petitioners are entitled to be released on bail on strict conditions. In the result, the Bail Application is allowed as follows: - (a) The petitioners shall be released on bail on their executing bond for Rs.10,00,000/- (Rupees Ten Lakhs Only) each, with two solvent sureties each B.A No.9502 of 2022 7 - for the like sum to the satisfaction of the jurisdictional Magistrate. - (b) The petitioners shall appear before the Investigating Officer on all Mondays, Wednesdays - and Fridays between 10 A.M. and 11 A.M. till the final report is filed. - (c) The petitioners shall not leave the territorial jurisdiction of Kottayam and Ernakulam Districts - without the permission of the Investigating Officer. - (d) The petitioners shall surrender their passport - before the jurisdictional Court. If they do not - have passport, they shall file affidavit to that - effect within a period of two weeks from their - date of release. - (e) The petitioners shall not try to influence the prosecution witnesses or attempt to tamper with - the evidence. - (f) The petitioners shall not interfere with the B.A No.9502 of 2022 8 investigation. If any of these conditions are violated, the jurisdictional Magistrate is at liberty to cancel their bail in accordance with law. K.BABU, JUDGE KAS B.A No.9502 of 2022 9 ## **APPENDIX OF BAIL APPL. 9502/2022** ## PETITIONER ANNEXURES Annexure1 THE TRUE COPY OF THE NOTICE DATED 08.06.2022 SERVED TO THE 1ST PETITIONER. Annexure A1(a) THE TRUE COPY OF THE NOTICE DATED 08.06.2022 SERVED TO THE 2ND PETITIONER. Annexure A2 THE TRUE COPY OF THE ORDER IN BAIL. APPL. NO. 4994 OF 2022 DATED 08.08.2022 Annexure A3 THE TRUE COPY OF THE ARREST MEMOS OF THE 1ST PETITIONER DATED 10.11.2022. Annexure A3(a) THE TRUE COPY OF THE ARREST MEMOS OF THE 2ND PETITIONER DATED 10.11.2022. Annexure A4 THE TRUE COPY OF THE NOTICES DATED 18.11.2022 ISSUED TO THE 1ST PETITIONER. Annexure A4(a) THE TRUE COPY OF THE NOTICES DATED 18.11.2022 ISSUED TO THE 2ND PETITIONER. Annexure A5 THE TRUE COPY OF THE REPORT DATED 21.11.2022 FILED BY THE 2ND RESPONDENT Annexure A6 THE TRUE COPY OF THE BAIL ORDER DATED 22.11.2022 IN CRL.M.P. NO. 5436 OF 2022 ON THE FILES OF THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT (ECONOMIC OFFENCE)