Kashmir Kumar Agrawal vs State Of Odisha
2021 Latest Caselaw 11706 Ori

                  ORISSA HIGH COURT: CUTTACK

                        BLAPL No. 9462 of 2020


       (An application under section 439 of the Code of Criminal
                           Procedure, 1973)
                               ---------------

Kashmir Kumar Agrawal ..... Petitioner

-Versus-

      State of Odisha                            .....    Opp. Party


         For Petitioner    : M/s. A. Rastogi, R.P. Kar,
                             Mr. Adhiraj Mahanty and A.K. Dash,
                             Advocates.

         For Opp. Party:     Mr. Sunil Kumar Mishra,
                             Addl. Standing Counsel for CT & GST

      P R E S E N T:

THE HONOURABLE MR. JUSTICE SASHIKANTA MISHRA

Date of hearing: 03.11.2021 :: Date of Order:15.11.2021

SASHIKANTA MISHRA, J. Heard Mr. R.P. Kar, learned counsel

for the petitioner and Sri Sunil Kumar Mishra, learned

Additional Standing Counsel for CT & GST.

// 2 //

2. The petitioner is in custody since 17.08.2020 in

connection with 2(c)CC Case No. 38/2020 pending in the

court of learned S.D.J.M., Panposh corresponding to GST

and CT Enforcement Unit, Rourkela Case No. 1/2020-

2021 for the alleged commission of offence punishable

under Section 132(1)(i) of Odisha Goods and Services Tax

Act,2017(hereinafter referred to as OGST Act).

3. The prosecution allegation is that the petitioner

claims to be the Director of a company named M/s.

Madhusmita Steel Industries Pvt. Ltd. Rourkela, which is

a fictitious entity. It is alleged that the petitioner effected

purchase of goods worth Rs.100.44 crores and availed

Input Tax Credit (ITC) of Rs.18.08 crores and passed on

ITC worth Rs.19.78 crores against sale of Rs.109.88

crores. Thus, the total ITC availed and passed on by the

accused in his individual capacity against the name of the

said company comes to Rs.37.86 crores. However, there

was neither any purchase nor sale of goods and that the

transactions were made only on paper with a view to // 3 //

illegally avail ITC. Similarly, it is alleged that the

petitioner acting in collusion with other persons created

17 fictitious firms and availed bogus ITC of Rs.117.25

crores on the basis of fake purchase invoices and passed

on bogus ITC of Rs.130.78 crores on the basis of fake sale

of goods both inside and outside the State of Odisha. In

the process, the accused defrauded the exchequer to the

tune of Rs.248.03 crores. Thus, the petitioner availed and

passed on total ITC to the tune of Rs.285.89 Crores

thereby, committing the offence under the aforementioned

section of OGST Act.

The alleged fraud having come to light, the

above mentioned case was registered and upon sanction

accorded by the Commissioner of GST, the accused and

other persons involved in the occurrence were prosecuted.

As already stated, the accused was arrested and taken

into custody on 17.08.2020 during investigation. The

prosecution report was submitted on 09.10.2020 by the

Deputy Commissioner of State Tax Enforcement Unit, // 4 //

Rourkela (Investigating Officer) against the accused-

petitioner with a request to keep the investigation open for

addition of new materials and evidence.

4. Sri R.P. Kar, submits that even assuming that

there is a prima facie case against the petitioner, fact

remains that the prescribed punishment for the alleged

offence is only five years and the accused has in the

meantime stayed more than one year in custody. Since

the prosecution report has already been submitted, there

should be no impediment in directing release of the

petitioner. Mr. Kar further contends that the master mind

of the entire transaction as per the prosecution report was

one Atul Bansal, who, being similarly prosecuted for the

same offence and facing trial in 2(c)CC No. 6/2019

pending in the court of learned JMFC, Chandikhol

corresponding to GST and CT Enforcement Wing, Jajpur,

Jajpur Road Case No. 1/2019-20, has since been granted

bail by this court vide order dated 06.03.2020 passed in

BLAPL No. 9529 of 2019. It is also contended that there is // 5 //

no scope of tampering of evidence as all the information

and records are stored in electronic form and within the

knowledge and possession of the prosecution and as such,

any further custodial interrogation is not necessary. That

apart, the petitioner being a permanent resident of

Rourkela, there is hardly any chance of his absconding

and on the contrary the petitioner undertakes to

cooperate with the prosecution as and when necessary.

Finally, Mr. Kar submits that the petitioner does not have

any criminal antecedents. On such grounds it is prayed

that the accused should also be similarly treated and

released on bail.

5. Sri Sunil Kumar Mishra, learned Addl.

Standing Counsel for CT & GST on the other hand, has

vehemently opposed the prayer for bail by submitting that

even though prosecution report has been submitted,

investigation was kept open and that further investigation

is presently in progress. It is further submitted that

investigation so far has revealed that the fraud played by // 6 //

the accused has had its effect not only in Odisha but also

in several States. Therefore, having regard to the modus

operandi adopted by the accused and his intention of

defrauding the State exchequer, it can be reasonably

assumed that after release, he will seek to tamper with the

evidence. It is further argued that the case of co-accused-

Atul Bansal cannot be equated with that of the present

accused, inasmuch as, after being granted bail, the said

Atul Bansal violated the conditions imposed, for which the

trial court has issued NBW against him, against which he

has approached this court in CRLMC No.1702 of 2022,

which is presently pending. It is further submitted by Mr.

Mishra that it would be evident from the prosecution

report that the present petitioner had not cooperated with

the investigation and therefore, such conduct disentitles

him from bail as he may not cooperate with the

investigating agency even now when further investigation

is in progress. Citing the above grounds, Mr. Mishra has

forcefully argued that the accused petitioner should not // 7 //

be granted bail.

6. Before delving into the merits of rival

contentions it would be apt to mention that both parties

have referred to several decisions to buttress their

respective points.

Mr. Kar has referred to the order of bail passed

by this court in favour of the co-accused- Atul Bansal. Mr.

Kar has also referred to some other orders passed by this

court, all of which involve the offence under Section

132(1)(b)(c)&(i) of OGST Act, 2017, such as, BLAPL

No.4125 of 2020 (Pramod Kumar Sahoo vs. State of

Odisha), BLAPL No. 4266 of 2020 (Bikash @ Vikas

Sarawgi vs. State of Odisha), BLAPL No. 6643 of 2020 (

Amit Beriwal vs. State of Orissa), BLAPL No. 3175 of

2021 (Subash Chandra Swain vs. State of Odisha),

BLAPL No. 4687 of 2020 (Kamal Pasati vs. Union of

India), and BLAPL No. 7260 of 2019 (Rajesh Kumar

Mishra vs. Union of India). It is observed that in all the

cases, the concerned petitioners, being involved in cases // 8 //

involving commission of offence punishable under Section

132(1)(b)(c)&(i) of OGST Act have been granted bail.

7. On the other hand, Mr. S.K. Mishra, has

referred to the decision of the apex court in the case of

Y.S. Jagan Mohan Reddy vs. Central Bureau of

Investigation reported in (2013) 55 OCR (SC) 825; State

of Gujarat vs. Mohanlal Jitamalji Porwal reported in

AIR 1987 SC 1321; Nimmagadda Prasad vs. Central

Bureau of Investigation, reported in (2013) 7 SCC 466;

and judgment of this Court in BLAPL No. 7580 of 2018

(Mrs. Leena Mahesh Motewar vs. Republic of India);

and BLAPL No. 5883 of 2021 (Smruti Ranjan Sahoo vs.

State of Odisha).

8. The ratio laid down in the aforementioned cases

decided by the apex Court as cited by Mr. Mishra mainly

postulates that economic offences constitute a class apart

and need to be visited with a different approach in the

matter of bail and that the entire community is aggrieved,

if the economic offenders, who ruin the economy of the // 9 //

State are not brought to book.

In the case of Leena Mahesh Motewar (supra),

this court held that there is no absolute hidebound rule

that bail must necessarily be granted to the co- accused

when another co-accused has been granted bail.

9. This Court is fully conscious of the ratio laid

down in the cases referred above but then, it is also the

settled position of law that bail is basically a matter of

judicial discretion, for which the facts and circumstances

of each case would have to be considered whether to grant

bail or not. As has been held by the apex court in the case

of Gurucharan Singh and others vs. State (Delhi

Administration) reported in AIR 1978 SC 179, there

cannot be an inexorable formula in the matter of granting

bail.

The position of law as laid down in the cases of

Y.S. Jagan Mohan Reddy (supra), Mohanlal Jitamalji

Porwal (supra) and Nimmagadda Prasad (supra), is

that economic offences must be viewed with a different // 10 //

approach in the matter of bail, but it has nowhere been

laid down as an inflexible rule that bail should not be

granted in economic offences.

As regards the observation of this court in the

case of Leena Mahesh Motewar (supra), while being in

respectful agreement with the above proposition, this

Court is of the humble view that in the case of Leena

Mahesh Motewar (supra) it has merely been reiterated

that the principle of parity cannot be applied in all cases,

but it has not been held that such principle cannot be

applied in any case. On the principle of parity, the Apex

Court in a recent decision reported in (2021) 6 SCC 230,

(Ramesh Bhavan Rathod vs. Vishanbhai Hirabhai

Makwana (Koli) and another) have observed as follows:

"In the event that parity is claimed in such a case thereafter, it is for that court before whom parity is claimed to determine whether a case for the grant of bail on reasons of parity is made out."

Therefore, the case of Leena Mahesh Motewar (supra)

cannot be taken as a bar to consider the grant of bail to

the accused on grounds of parity in the case at hand.

// 11 //

10. The facts of the case may now be considered in

the backdrop of the aforementioned legal propositions.

The petitioner is in custody since 17.08.2020.

P.R. was submitted on 09.10.2020 keeping the

investigation open. From the report filed by the

prosecution on 02.07.2021, it is seen that further

investigation is still in progress. The question is, can this

be a ground to deny bail to the accused indefinitely. It

should be kept in mind that the offences under Section

132(1)(b)(c)&(i) of the OGST Act are punishable with a

maximum punishment of five years Rigorous

Imprisonment. Therefore, investigation ought to be

completed within 60 days as per Section 167 Cr.P.C. Of

course, Section 173(8) Cr.P.C. permits the investigating

agency to keep the investigation open. But the same, if not

concluded for an indefinite period, cannot obviously be

cited as a ground to detain the accused in custody. As is

seen, the initial prosecution report was filed way back on

09.10.2020 and till date further investigation is said to be // 12 //

in progress. Thus, more than a year has elapsed from the

date of submission of initial P.R.. This cannot be a ground

to detain the accused in custody indefinitely.

As regards the contention that the case of co-

accused Atul Bansal and the present case stand on

different footings, Mr. Kar has referred to the prosecution

report to contend that the said Atul Bansal has been

categorically mentioned as being the master-mind of the

entire fraudulent transactions. Mr. Kar has drawn

attention of this Court to paragraphs, 8, 9, 13, 15, 17 and

18, the Observation-A at page 43, Summary of Findings at

page 141 & 142, 193, and the Concluding Observation at

page 195-196 of the prosecution report, wherein accused

Atul Bansal has been described as the mastermind. On

such basis, it is contended by Mr. Kar that if the

mastermind has been granted bail, there is no reason why

the same benefit should not be granted to the present

accused, who according to the prosecution, was merely

acting at his instance.

// 13 //

Without expressing any opinion on this point,

this Court is of the considered view that since the

transactions in question were basically one and the same

involving the present petitioner and the co-accused Atul

Bansal, there is hardly any justification to treat the

petitioner differently than him.

11. Coming to the apprehension of the prosecution

that the present petitioner may tamper with the evidence,

this Court is unable to accept the same for the reason

that a bare perusal of the prosecution report would

suggest that the same was submitted after thorough

investigation during which several documents and records

were verified and statements collected from different

persons. The report of further investigation also suggests

that the same has been/is being conducted in different

States whereby, several incriminating materials have

supposedly been discovered. It is not specifically put forth

by the prosecution as to how the accused can possibly

tamper with the evidence that has already been collected // 14 //

against him and which are basically document-based and

also stored in electronic form. Thus, the apprehension

expressed by the prosecution does not appear to be

reasonable for being considered as a ground to refuse bail

to the petitioner.

The further apprehension that given his past

conduct the accused may not cooperate with the

investigation, also does not seem to be well founded

because cooperating in the investigation can always be

laid down as a condition for his release on bail and in the

event the accused violates such condition it would always

be open to the prosecution to seek cancellation of the bail

but only on such apprehension, bail cannot be denied.

12. From the foregoing discussion, therefore, this

Court finds that the petitioner has been successful in

making out a good case for his release on bail. On the

other hand, the prosecution has failed to satisfy the court

as to how it would be prejudiced by grant of bail to the

petitioner.

// 15 //

13. In the result, the application for bail is allowed.

It is directed that the petitioner shall be released on bail

by the court in seisin over the matter on such terms and

conditions as may be imposed by it including the following

conditions:

(i) The accused shall not leave the territorial

jurisdiction of Sundargarh district without leave

of the court in seisin of the matter.

(ii) He shall fully cooperate with the ongoing

further investigation and make himself

available as and when required for such

purpose.

14. BLAPL is accordingly disposed of accordingly.

................................

Sashikanta Mishra, Judge Orissa High Court, Cuttack The 15th November, 2021/ A.K. Rana