It’s Not A Rule That Bail Should Be Denied In Every Case Where Allegation Is One Of Grave Economic Offences: Punjab & Haryana High Court

The Punjab and Haryana High Court observed that it is not a rule that bail should be denied in every case where the allegation is one of grave economic offences since there is not such bar created in the relevant enactment passed by the Legislature nor does the jurisprudence provide so.

The Court observed thus in Petitions arising out of the same Complaint seeking grant of regular bail to the accused persons in an alleged offence under Section 132(1)(b) of the Central Goods & Services Tax Act, 2017 (CGST Act).

A Single Bench of Justice Manisha Batra held, “While considering the question of grant of bail, the gravity of offences is an aspect, which is required to be taken into consideration. The gravity has to be gathered from the facts and circumstances arisen in each case. One of such circumstances is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. While considering the prayer for grant of bail in any offence, including economic offences, it is not a rule that bail should be denied in every case where the allegation is one of grave economic offences since there is not such bar created in the relevant enactment passed by the Legislature nor does the jurisprudence provide so.”

The Bench explained that the position of law regarding grant of bail is that the basic jurisprudence relating to bail in economic offences remains the same in as much as the grant of bail is the rule and its refusal is the exception, so as to ensure that an accused has the opportunity to get fair trial; however, at the same time, it is not advisable to categorize all the economic offences into one group and deny bail on that basis.

Advocate Saurabh Kapoor represented the Petitioners while Senior Standing Counsel (SSC) Rajesh Sethi represented the Respondent.

Brief Facts

On receipt of an information in the office of the Respondent-Directorate General, Goods & Service Tax Intelligence to the effect that a fictitious firm was formed under the name of M/s Dashmesh Traders, and this firm was engaged in availing and passing on fraudulent Input Tax Credit (for short ‘ITC’), investigation was initiated by the Respondent in order to ascertain the genuineness of the firm and its business. It was revealed that the firm was registered at a fictitious address by misusing false and fabricated documents. It was further revealed that one of the major beneficiaries in the transactions conducted through the firm was one M/s NK Gupta Builders Pvt. Ltd. Sahil Gupta, Director of the above company, was contacted and he recorded his statement that one Sandeep Garg was acting as a middleman for generating good less invoices and procuring them from M/s Dashmesh Traders. Aforesaid Sandeep Garg was proprietor of a firm named M/s Pashupati Enterprises, who, on being questioned, recorded a statement that good less invoices along with e-way bills and liabilities issued from M/s Dashmesh Traders had been provided to him by the Petitioner Narinder Kumar Joshi to M/s NK Gupta Builder Pvt. Ltd.

The Respondent conducted a search in the office of the Petitioners and recovery of unaccounted cash to the tune of Rs. 16,73,900/- along with letter heads of different firms registered under GST, passbooks of different banks, cheque books and notebooks/diaries, was effected. It was revealed that the Petitioners and Mohit Joshi were actively involved in operation of 65 fake/bogus firms and were engaged in providing good less invoices along with e-way bills etc. and total ITC to the tune of Rs. 325 crores had been passed on by those fictitious firms. Notices were issued to the Petitioners and after recording of their statements, they were arrested. A formal Complaint was filed against them before the competent Court after completion of necessary investigation/inquiry and usual formalities. They moved applications for grant of regular bail before the jurisdictional Magistrate, which were dismissed and then by the Additional Sessions Judge, Chandigarh. Hence, they were before the High Court.

Reasoning

The High Court in the above regard, enumerated the following broad parameters to be considered while deciding prayer of an accused for grant of bail –

(i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence;

(ii) nature and gravity of the charge;

(iii) severity of the punishment in the event of conviction;

(iv) danger of accused absconding or fleeing if released on bail;

(v) character, behaviour, means, position and standing of the accused;

(vi) likelihood of the offence being repeated;

(vii) reasonable apprehension of the witnesses being tampered with; and

(viii) danger, of course, of justice being thwarted by grant of bail.

“They are in custody since 28.11.2024. Nothing has been shown to this Court which may justify the further detention of the petitioners in prison. So far as petitioner Narinder Kumar Joshi is concerned, it has come on record that some inquiry had been initiated against him under the provisions of Customs Act. However, there is no material on record to show that any FIR has been registered against him and he is facing trial for commission of any offence under the provisions of that Act”, said the Court.

The Court noted that the evidence to be rendered by the Respondent would essentially be documentary and electronic, which will be through official witnesses, due to which, there cannot be any apprehension of tampering, intimidating or influencing the witnesses and further as it appears justified to strike a fine balance between the need for further detention of the Petitioner when no custodial interrogation has been claimed at all by the department, the Petitioners are entitled to be released on bail but subject to certain conditions.

Accordingly, the High Court allowed the Petitions and granted bail to the accused persons.

Cause Title- Narinder Kumar Joshi v. Directorate General, Goods & Service Tax Intelligence (Neutral Citation: 2025:PHHC:071840)

Appearance:

Petitioners: Advocate Saurabh Kapoor

Respondent: SSC Rajesh Sethi and Advocate Kanika Sachdeva.

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