SGST High Court Cases

GST – Section 69 & 138 of CGST Act – Arrest – Bail - Fraudulent availment and utilization of ineligible input tax credit on the strength of bogus invoices - Circular transaction of goods without actual supply – Bail application in connection with offence committed under section 132(1)(c) and 132(1)(b) of the CGST Act – HELD - The requirement under sub-section (1) of section 69 is ‘reasons to believe’ that not only a person has committed any offence as specified but also as to why such person needs to be arrested – in the reasons recorded by the Principal Additional Director General, other than paraphrasing the requirement of section 41 Cr.P.C., no concrete incident has been mentioned therein recording any act of tampering of evidence by the petitioner or threatening / inducing any witness besides not co-operating with the investigation, not to speak of fleeing from investigation. In such circumstances, the Principal Additional Director General could not have formed a reason to believe that the petitioner should be arrested – the use of the word “shall” in sub-section (3) of section 138 is instructive as it conveys the legislative intent that once compounding takes place, no further proceeding shall be initiated against the accused person in respect of the same offence and if any criminal proceeding has been initiated, the same would stand abated - notwithstanding the allegation of serious financial impropriety against the petitioner, the case against him is not even at the under-trial stage; it is at the pre-trial stage where even formal accusation in the form of a first information or a complaint has not been made - continuing the detention of the petitioner may not at all be justified - it is the duty of the constitutional court to strike a fine balance between the need for custodial interrogation and the right of an accused to personal liberty – the petitioner shall be enlarged on conditional bail

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