Pankaj Aggarwal S/O Shri Hari Prakash ... vs Union Of India (2024:Rj-Jp:41047)
2024 Latest Caselaw 5960 Raj/2

Rajasthan High Court

Pankaj Aggarwal S/O Shri Hari Prakash ... vs Union Of India (2024:Rj-Jp:41047) on 25 September, 2024

Author: Ganesh Ram Meena

Bench: Ganesh Ram Meena

[2024:RJ-JP:41047]

        HIGH COURT OF JUDICATURE FOR RAJASTHAN
                    BENCH AT JAIPUR

     S.B. Criminal Miscellaneous Bail Application No. 8451/2024
Pankaj Aggarwal S/o Shri Hari Prakash Agarwal, Aged About 42
Years, R/o D-48, First Floor, Old Gupta Colony, Vijay Nagar,
Delhi-110009 (Accused Confined In Central Jail, Jaipur)
                                                                          ----Petitioner
                                       Versus
Union of India, Directorate Of Goods And Service Tax, Jaipur
Zone Unit, Rajasthan, through Special PP
                                                                      ----Respondent


For Petitioner(s)             :    Mr. Ramanuj Sharma alongwith
                                   Mr. A.K. Seth &
                                   Mr. Chinmaya Seth
For Respondent(s)             :    Mr. Ajatshatru Mina, Special Public
                                   Prosecutor

Ms. Apeksha Tiwari Mr. Swadheen Singh Mr. Himanshu Kala Mr. M. Jeenwal

HON'BLE MR. JUSTICE GANESH RAM MEENA

Order 25/09/2024

1. This bail application has been filed by the accused

petitioner u/S 483 BNSS in connection with a case F.No.

DGGI/INV/GST/ 123/ 2023-Gr. F.0/oADG- DGGI- Jaipur,

registered at Directorate General of Goods and Service Tax

Intelligence, Jaipur Zonal Unit, Jaipur for the offence

punishable under section 132(1)(b) (c), (f), (l) of the Central

Goods and Service Tax Act, 2017 (for short 'the Act of 2017').

2. The facts in brief of the matter are that a case F.No.

DGGI/INV/GST/ 123/ 2023-Gr. F.0/oADG- DGGI- Jaipur, was

registered at Directorate General of Goods and Service Tax

Intelligence, Jaipur Zonal Unit, Jaipur for the offence

[2024:RJ-JP:41047] (2 of 22) [CRLMB-8451/2024]

punishable under section 132(1)(b) (c), (f), (l) of the Act of

2017 on the basis of statement of one Ashutosh Gupta

recorded under section 70 of the Act of 2017 wherein it has

been stated that the accused petitioner has created fake

firms and has issued goods/ invoices and has pass on the

input tax credit which is prescribed under section 16 of the

Act of 2017, and therefore, the contravention of said

provision is an offence under section 132 of the Act of 2017.

3. During the course of investigation, notice was

issued to the accused petitioner for recording his statement

and also to submit the documents under the provision of

section 70 of the Act of 2017.

4. The complaint was filed under section 190 of the

Code of Criminal Procedure, 1973 for offences punishable

under sections 174 and 175 IPC stating that the accused

petitioner is neither appearing for recording his statement

and nor submitting the documents in pursuance of notice

issued to him. The said complaint was filed on 02.09.2024

before the concerned Magistrate and requested to take

cognizance.

5. After arresting the petitioner and making

investigation, the Enforcement Officer Goods and Service Tax

Directorate, Jaipur Unit, Jaipur submitted the complaint

before the Special Court against the accused petitioner for

the offence punishable under section 132(1) of the Act of

[2024:RJ-JP:41047] (3 of 22) [CRLMB-8451/2024]

2017 stating that in the statements of one Ashutosh Garg

recorded on 31.10.2023 and 1.11.2023 during investigation

of case number registered at DGGIJZU bearing No. F. F.No.

DGGI/INV/GST/ 123/ 2023-Gr. F.0/oADG-ZU- Jaipur. In the

aforesaid statements he is said to have that he has created

70-80 fake firms and given to one Anil Garg and the accused

petitioner- Pankaj Aggarwal in lieu of Rs.5 lakh each and he is

further said to have stated that he used to file the return,

however, accused petitioner Pankaj Aggarwal used to issue

the invoices of scrap, hosiery, paper products etc. and on the

basis of his statements, investigation was started and during

investigation Anil Garg is said to have admitted this fact that

he has issued the fake invoices in the names of seven firms

so as to pass on input tax credit amount amounting to Rs.

1032 crore.

6. Accused petitioner Pankaj Aggarwal is said to have

appeared for recorded his statement under section 70 of the

Act of 2017 and he is said to have stated that he used to

issue fake invoices to pass on the input tax credit on a

commission of 0.10 percent.

7. The search was made and various documents

related to fake firms were recovered from certain premises.

Certain What's Apps also said to have been taken on record

to substantiate the allegations against the accused petitioner.

It is also stated in the complaint that the statements of Ravi

[2024:RJ-JP:41047] (4 of 22) [CRLMB-8451/2024]

Kumar who is said to be the employee of the accused

petitioner was also recorded and so also the statement of one

Manish Tayal. It is also alleged that certain documents were

also recovered from the Laptop of Ahusosh Gupta in the

name of Pankaj Bhaiya alleged to be present petitioner who is

also said to have substantiated the allegations against the

accused petitioner. The documents were also recovered on

09.12.2023 while making search at the premises and one

Ravi Kumar said that all these documents are related to the

accused petitioner. It is also alleged that Manish Tayal and

Ravi Kumar were working for the accused petitioner. During

investigation, statements of one Jatin Gupta were also

recorded on 2.2.2024 who is also said to have substantiated

the allegations against the accused petitioner.

8. After investigation it is said to have found that the

accused petitioner issued fake invoices without actual transfer

of goods so as to pass on the inputs tax credit and for that

purpose he has created 49 fake firms. It is also alleged that

on the basis of the investigation and statements of certain

witnesses given voluntarily, the allegations against the

accused petitioner for the offence under section 132(1)(b)(c)

(f)(l) of the Act of 2017 is found proved and the said offence

is cognizable and non-bailable one with the averments that

the accused petitioner has evaded GST amounting to

Rs.215.67 crores.

[2024:RJ-JP:41047] (5 of 22) [CRLMB-8451/2024]

9. Learned counsel appearing for the accused

petitioner submits that the complaint against the accused

petitioner was filed on 20.06.2024 and investigation was

commenced on 16.11.2023. He further submitted that the

accused petitioner was arrested on 23.04.2024 and since

then he is behind the bars. Counsel further submits that the

offence alleged to have been committed by the accused

petitioner is compoundable u/S 138 of the Act of 2017 and

maximum sentence provided is five years. Counsel also

submits that Ashutosh Garg on whose statements this case

has been registered, has been granted bail by Hon'ble

Supreme Court. Counsel further submits that a complaint has

already been filed u/S 190 CrPC and further there is no

provision of supplementary complaint, therefore there is no

scope of further investigation available in law. Counsel also

submits that till date no calculation and names are brought

on record to show the amount of ITC actually availed by

beneficial users or the amount of ITC taken as refund by

beneficial users, therefore, no evidence of loss to the

Government Exchequer is brought on record. Counsel further

submits that no evidence is made part of the complaint to

show prime facie that ingredients of Section 132(1) are

fulfilled. Counsel also submits that no recovery of any amount

has been made from the accused petitioner since the start of

investigation. Counsel further submits that there is no

[2024:RJ-JP:41047] (6 of 22) [CRLMB-8451/2024]

concept of fake registration of any firm as GST registration is

provided to the firms u/S 22-30 of the CGST Act after proper

verification of documents and premises. He further submits

that ITC can only be utilized after due verification as per

Section 16-21 and Section 49(A) of the CGST Act, 2017.

Counsel also submits that refund can only be granted after

following the due procedure given u/S 54-58 of the CGST Act

read with CGST Rules. Counsel further submits that no

offence was committed in Jaipur and the Metropolitan

Magistrate (Economic Offences) has no jurisdiction to take

cognizance and try the case as per the provisions of BNSS,

2023 or CrPC 1973. Counsel further submits that the accused

petitioner did not supply any goods or services under the

CGST Act, 2017 and he was involved only in financial

transactions. He also submits that the detention of the

accused petitioner was illegal and the prosecution had not

taken any transit remand. Counsel also submits that Ravi

Kumar has filed complaint against DGGI Officials for assault.

Counsel further submits that all the witnesses are

government officers and they cannot be influenced and the

objection raised by the prosecution is merely on the basis of

assumption and presumption. He also submits that being an

economic offence, all data is in electronic form, therefore

there is no chance of tampering or destruction of data.

[2024:RJ-JP:41047] (7 of 22) [CRLMB-8451/2024]

Counsel of the accused petitioner further submits that

the prosecution has adopted the pick and choose policy. The

prosecution has to rely upon the complete document or to

reject it. Counsel also submits that the private persons,

whose statements were recorded were not made witnesses in

the complaint dated 20.06.2024 and DGGI cannot repy upon

them and also the vediography of the statements relied upon

was not made. Counsel also submits that the aadhar cards,

PAN cards and cheque books & digital signatures were

recovered from the PG accommodation and not from the

residential premises which were also not made part of the

complainant. Counsel also submits that there is no any case

pending against the accused petitioner, specially any PMLA

matter. Counsel further submits that the trial of the case has

not even started and it may take long time, therefore the

accused petitioner may be released on bail.

10. In support of his submissions, counsel appearing

for the accused petitioner has placed reliance upon following

judgments:-

1. Ashutosh Garg Vs. Union of India [Petition (s) for Special Leave to Appeal (Crl.) No(s). 8740/2024], decided on 26.07.2024.

2. Abhishek Singhal Vs. Union of India (S.B. Criminal Misc.

Second Bail Application No. 14211/2011), decided on

11.11.2021.

3. Babulal Qazi Vs. Union of India (S.B. Criminal Misc. Bail Application No. 12786/2022), decided on 13.02.2023.

[2024:RJ-JP:41047] (8 of 22) [CRLMB-8451/2024]

4. C. Pradeep Vs. The Commissioner of GST and Central Excise Selam & Anr. [Petition (s) for Special Leave to Appeal (Crl.) No(s). 6834/2019], decided on 06.08.2019.

5. Gaurav Singhal Vs. Union of India, reported in (2024) 19 Centax 479 (All.), decided on 29.05.2024.

6. Laxman Chaudhary Vs. Union of India (S.B. Criminal Misc. Bail Application No. 16422/2021), decided on 06.10.2021.

7. Manish Sisodia Vs. Directorate of Enforcement (MANU/SC/0861/2024), decided on 09.08.2024.

8. Mohd. Shadab Kadri Vs. Union of India (S.B. Criminal Misc. Bail Application No. 2299/2022), decided on 06.04.2023.

9. Nikhil Gupta Vs. Union of India alongwith connected matter (S.B. Criminal Misc. Second Bail Application No. 17510/2022).

10. P. Chidambaram Vs. Directorate of Enforcement (MANU/SC/1670/2019), decided on 04.12.2019.

11. Ratnambar Kaushik Vs. Union of India Petition for Special Leave to Appeal (Crl.) No. 10319/2022, decided on 05.12.2022.

12. Ravindra Kumar Vs. Union of India & Anr. alongwith connected matters (S.B. Criminal Misc. Second Bail Application No. 2937/2022), decided on 08.02.2023.

13. Rishabh Jain Vs. State of Rajasthan & Anr. (S.B. Criminal Misc. Bail Application No. 10718/2023), decided on 04.12.2023.

14. S.R. Sukumar Vs. S. Sunaad Raghuram (MANU/SC/0703/2015), decided on 02.07.2015.

15. Saurabh Jindal Vs. Union of India alongwith connected matter (S.B. Criminal Misc. Bail Application No. 14791/2022), decided on 16.12.2022.

[2024:RJ-JP:41047] (9 of 22) [CRLMB-8451/2024]

16. Shri Mohammed Ali Akram Khan Vs. Union of India & Anr.

(S.B. Criminal Misc. Bail Application No. 13860/2022), decided on 06.04.2023.

17. Tarun Jain Vs. Directorate General of GST Intelligence (Bail Appln. 3771/2021 & Crl.M.A. 16552/2021), decided on 26.11.2021.

18. Vikas Bajoria Vs. Union of India (S.B. Criminal Misc. Bail Application No. 17349/2022), decided on 06.01.2023.

19. Vineet Gupta Vs. Union of India (S.B. Criminal Misc. Bail Application No. 7162/2023), decided on 20.07.2023.

Counsel for the accused petitioner in support of his

submissions has placed reliance upon a Circular No. F.No.

CBIC-20001/2/2022-GST, issued by the Government of India,

Ministry of Finance, dated 06.07.2022.

11. Mr. Ajatshatru Mina Learned Special Public

Prosecutor while opposing the submissions of learned counsel

for the accused petitioner submits that the petitioner and Sh.

Anil Kumar are the key person in the matter and they have

purchased and operated some of the fake firms from Sh.

Ashutosh Garg. They are also running their own syndicate of

fake firms. Sh. Sanket Gupta, accountant of Sh. Ashutosh

Garg has stated in his statements dated 16.311.2023 and

17.11.2023 that date found in "Pankaj bhaiya ledger" folder

in laptop of Sh. Ashutosh Garg recovered from the premises

of Sh. Sanket Gupta, Accountant of Sh. Ashutosh Garg,

belong to the accused petitioner whose mobile No. is

99991xxxxx. The accused petitioner has been examined and

[2024:RJ-JP:41047] (10 of 22) [CRLMB-8451/2024]

it was found to contain large number of firms who have

purchased bills from fake firms operated by Sh. Ashutosh

Garg.

Learned Special PP further submits that Sh.

Ashotosh Garg admitted to issuing fake invoices from 294

fake firms being run by him. Sh. Ashutosh Garg admitted to

passing on fake ITC of about 1032 Crore from him 294 fake

firms. Sh. Ashutosh Garg was arrested on 02.11.2023.

Learned PP also submits that the petitioner voluntarily

accompanied Sh. Sanket Gupta, Accountant of Sh. Ashutosh

Garg, when Sh. Sanket Gupta was summoned by his office.

Accordingly, the petitioner was summoned by SIO on

17.11.2023 and his statement was recorded on the very

same day. During statement the accused petitioner stated

taht he used to work as broker for cash withdrawal from

RTGS kdone by fake firm handlers. Sh. Ashutosh Garg used

to issue fake invoices form his firms and when he needed to

withdraw cash from his fame firm's accounts, he used to

contact the petitioner, who then arranged importer's account

numbers, to which Sh. Ashutosh Garg sent RTGS and took

cash from the importer. The petitioner used to charge 10%

commission on the said transactions. Thus, the accused

petitioner has accepted that he was involved in managing

RTGS and cash for fake firms of Sh. Ashutosh Garg.

[2024:RJ-JP:41047] (11 of 22) [CRLMB-8451/2024]

Learned Special PP further submits that during the

statement, the accused petitioner requested that he was

feeling tired, therefore another summons dated 17.11.2023

was issued by SIO to appear on 18.11.2023. The petitioner

appeared in the office to tender his statements on

18.11.2023. However, he left the office premises abruptly

without completing his statement on 18.11.2023. The

petitioner left his two mobile phones in the DGGI, JZU office,

Jaipur, which were immediately seized under Panchnama

dated 18.11.2023 under the belief that the same may contain

crucial information pertaining to ongoing investigation in the

case. After forensics examination of the aforesaid phones of

the petitioenr under Panchnama dated 20.11.2023 by Digital

Forensics Evidence Examiner of M/s Systools Software Pvt.

Ltd., large incriminating data regarding various firms was

found in whatsapp chats of Sh. Pankaj Aggarwal. Identity of

various persons, GST registration certificates, bank cheque

etc. were shared in the chats with various persons. These

chats indicates creation of fake firms, issuance of invoices

from them as well as circulation of money through bank

account of these firms.

Learned Special PP also submits that various

searches u/S 67(2) of the CGST Act were conducted at the

registered premises of various firms which were available in

various chats and appeared to have been created and

[2024:RJ-JP:41047] (12 of 22) [CRLMB-8451/2024]

managed by the accused petitioner. It has been observed that

the said firms were non-existing firms and there is no

business activity in the said firms and no person was

available at that premises. Hence, these firms are said to be

fake firms which were created and managed by accused

petitioner. It was also observed that Sh. Ravi Kumar and Sh.

Manish Tayal are the key persons/accomplices of the petitiner

for operating/managing the fake firms. It was also observed

that Sh. Ravi Kumar is director/authorized

signatory/proprietor in 11 of these firms and Sh. Manish Tayal

is director/authorized signatory/proprietor in 6 of these firms.

Learned Special PP further submits that during

search at the office premises of the petitioner, it revealed that

the said premises was owned by Sh. Hari Prakash Aggarwal,

father of the petitioner. Some more documents of fake firms

were also seized from the said premises, which were found in

the whatsapp chats of Sh. Pankaj Aggarwal which corroborate

the fact that Sh. Pankaj Aggarwal was running his fake firms

racket from the said premises. On perusal of the said

documents, it was observed that the said documents were

fabricated as in the various PAN Cards and Aadhar cards,

holder's photo was same but person name, Aadhar number,

PAN number were different.

Learned Special PP further submits that the

statements of accomplices of the petitioner i.e. Ravi Kumar,

[2024:RJ-JP:41047] (13 of 22) [CRLMB-8451/2024]

Sh. Jatin Gupta were recorded wherein they have stated that

the petitioner is involved in creation and operation of various

fake firms. Various summons have also been issued to other

persons i.e. Sh. Manish Tayal, Smt. Shalini Tayal wife of Sh.

Manish Tayal, Sh. Om Prakash Jha, Smt. Kiran wife of Sh.

Ravi Kumar involved in the case but they have not appeared

to tender their statement till date.

Learned Special PP in support of his submissions

placed reliance upon following judgments:-

1. Anil Kumar Vs. Union of India (S.B.. CMBA No. 6318/2024), decided on 31.07.2024.

2. Sh. Ashish Goyal Vs. Union of India (S.B. Criminal Misc.

Bail Application No. 4376/2024), decided on 12.09.2024.

3. Vishal Agarwal Vs. Union of India (S.B. Criminal Misc. Bail Application No. 4259/2024), decided on 12.09.2024.

4. Kalyan Chandra Sarkar Vs. Rajesh Ranjan @ Pallu Yadav & Anr., reported in (2004) 7 Supreme Court Cases 528, decided on 12.03.2004.

5. Prahlad Singh Bhati Vs. NCT, Delhi & Anr., reported in (2001) 4 Supreme Court Cases 280, decided on 23.03.2001.

6. Y.S. Jagan Vs. Central Bureau of Investigation, reported in (2013) 7 Supreme Court Cases 439, decided on 09.05.2013.

7. Smt. Chhaya Devi Vs. Union of India & Anr. (Criminal Misc. Bail Application No. 15190/2021), decided on 13.04.2021.

12. Considered the submissions and perused the

material made available on the record.

[2024:RJ-JP:41047] (14 of 22) [CRLMB-8451/2024]

13. On consideration of the submissions, it is found that

the present case has been registered by the Department on

the basis of the statements of one Mr. Ashutosh Garg and the

Department has relied upon the statements of Mr. Ravi

Kumar, Mr. Jatin Gupta, Sanket Gupta and Mr. Anil Kumar.

Along-with the complaint, the prosecution has submitted the

list of witnesses (Annex.A), where only 5 Officers of the

Department have been made witnesses and none of the

persons named above, whose statements recorded under

section 70 of the Act of 2017, have been incorporated as

witnesses to the matter.

14. It is a settled law that until and unless these above-

named persons are made witnesses or accused, their

statements cannot be relied upon because it is the right of

the accused to cross-examine the witnesses to prove the

trustworthiness of their version.

15. The allegation against the accused petitioner is that

he has created certain fake companies and has also borrowed

some fake companies from Mr. Ashutosh Garg in the names

of non-existing persons, got registered with the forged

identity documents and thereafter issued fake invoices said to

have been issued in the names of such fake firms so as to

pass on the input tax credit which is to be claimed by a

person or firm in whose favour such fake invoices have been

generated without there-being any actual transaction of

[2024:RJ-JP:41047] (15 of 22) [CRLMB-8451/2024]

goods or service. It is also submitted that several forged

documents have been recovered from the premises of the

petitioner including forged Aadhar Cards and PAN Cards in

the names of the non-existing persons.

16. Section 132 of the Act of 2017 reads as under:-

"Section 132. Punishment for certain offences.-

(1) 1 [Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences], namely:-

(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;

(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;]

(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(e) evades tax 3 [****]or fraudulently obtains refund and where such offence is not covered under clauses (a) to

(d);

(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act;

[2024:RJ-JP:41047] (16 of 22) [CRLMB-8451/2024]

(g) obstructs or prevents any officer in the discharge of his duties under this Act;

(h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;

(i) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;

(j) tampers with or destroys any material evidence or documents;

(k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or

(l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section,

shall be punishable-

(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine;

(ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh

[2024:RJ-JP:41047] (17 of 22) [CRLMB-8451/2024]

rupees, with imprisonment for a term which may extend to three years and with fine;

(iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine;

(iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause

(j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.

(2) Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.

(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, be for a term not less than six months.

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under this Act, except the offences referred to in sub-section (5) shall be non- cognizable and bailable.

(5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable.

(6) A person shall not be prosecuted for any offence under this section except with the previous sanction of the Commissioner.

[2024:RJ-JP:41047] (18 of 22) [CRLMB-8451/2024]

Explanation .- For the purposes of this section, the term " tax " shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act."

17. The offence in regard to preparation of forged

documents is not covered under section 132 of the Act of

2017. In view of the provisions of Section 132 of the Act of

2017, the only allegation levelled against the accused

petitioner is that he issued fake invoices in the names of fake

firms without there-being actual transactions of goods or

service so as to pass on the input tax credit.

18. During the course of arguments, when a query was

put to the learned Special PP, on instructions from the

Officers of the Department, stated that they have not lodged

any criminal case in regard to the forged documents seized

from the premises of the accused petitioner during search

because the Department has no jurisdiction to make

investigation in regard to the offences regarding preparation

and possession of the forged documents.

19. The allegation against the accused petitioner is that

he has issued fake invoices so as to pass on the input tax

credit which has caused huge loss to the economy by evasion

of GST.

[2024:RJ-JP:41047] (19 of 22) [CRLMB-8451/2024]

The investigation is continuing for the last more

than one year and the complaint has already been filed

against the accused petitioner. The Department has not been

even able to find out that how much input tax credit has been

claimed by which of the beneficiaries. During the course of

arguments, on a query put- forth by the Court, the learned

Public Prosecutor on instructions stated that in cases

registered under section 132 of the Act of 2017, the

Competent Authority can continue the investigation for a

maximum period of five years. He on instructions of the

Department Officers also stated that in the present case, they

will conclude the investigation within maximum further one

year.

20. After completion of investigation, the complaint has

already been submitted against the petitioner on the basis of

evidence collected during the investigation. Learned Special

PP also submitted that the evidence as regards the other co-

accused and the details about the beneficiaries of ITC is still

under investigation and the same shall be submitted before

the competent Court.

21. Once a complaint has been filed on the basis of

investigation made by the prosecution, in a criminal

jurisprudence no further evidence collected, can be used

against such an accused person.

[2024:RJ-JP:41047] (20 of 22) [CRLMB-8451/2024]

22. Learned Special PP has also relied upon various

judgments wherein the alleged input tax credit is less than

the input tax credit of this case, in those cases the bail

applications of the accused therein were rejected.

The present case was registered on the basis of

statement of Mr. Ashutosh Garg, who is also said to have

been involved in the evasion of GST by creating fake invoices

in the names of fake firms to pass on input tax credit. The

amount of alleged input tax credit wherein Mr. Ashutosh Garg

is found involved, is more than the alleged input tax credit.

Mr. Ashutosh Garg has been ordered to be released on bail by

the Hon'ble Apex Court vide order dated 26.07.2024 in case

of Ashutosh Garg(supra).

23. The maximum punishment for the offence alleged

against the accused petitioner is five years and presently the

accused petitioner has already suffered the custody of five

months.

24. The alleged offences, as per the provisions of law,

are compoundable.

25. Learned Special PP has also shown his

apprehension that if the accused petitioner is released on

bail, he may influence or temper with the prosecution

witnesses. The complaint has already been submitted qua the

accused petitioner wherein there are only five prosecution

witnesses, as per the list of witnesses and they all are the

[2024:RJ-JP:41047] (21 of 22) [CRLMB-8451/2024]

Officers of the Department. It is unfortunate that the

Department itself is apprehending the influence of the

accused petitioner over their own Officers. There is no

evidence on record to substantiate their apprehension and

also the dignity and honesty of the Officers of the

Department cannot be questioned and that too by the

Department itself without there-being any incriminating

evidence.

26. As per the record, statements of certain persons

have been recorded under section 70 of the Act of 2017,

substantiate the allegations against the accused petitioner

and they have retracted their statements and have also

submitted complaints against the Officers of the Department

with certain allegations.

27. The investigation started in the Month of July 2023,

as per the statement made by the learned Special Public

Prosecutor but even after passing of more than a year, the

Department has not been able to submit before the Court

that how many persons/ firms are the actual beneficiaries of

input tax credit and how much amount each on the basis of

fake invoices alleged to have been issued by the accused

petitioner in the name of fake firms. Unless this could be

ascertained, the allegation against the petitioner that because

of his acts, there is evasion of Rs.215.67 Crore, cannot be

accepted.

[2024:RJ-JP:41047] (22 of 22) [CRLMB-8451/2024]

28. Taking into consideration over all the facts and

circumstances of the case and the findings and the

observations stated above, this Court without expressing any

opinion on the merits and demerits of the case deems just

and proper to release the accused-petitioner on bail.

29. Accordingly, bail application of accused-petitioner

namely; Pankaj Aggarwal s/o Shri Hari Prakash

Agarwal is allowed and it is directed that the accused-

petitioner shall be released on bail provided he furnishes a

personal bond in the sum of Rs.1,00,000/- (Rupees One Lac

only) together with two sureties in the sum of Rs.50,000/-

(Rupees Fifty Thousand only) each to the satisfaction of the

trial Court with the stipulation that he shall appear before the

trial Court or any other Court to which the matter is

transferred, on all subsequent dates of hearing and as and

when called upon to do so.

30. The accused petitioner shall not leave India without

prior permission of this Court.

(GANESH RAM MEENA),J

Sharma N.K./ Dy. Registrar

Powered by TCPDF (www.tcpdf.org)