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In absence of formal accusation against the petitioners continued detention of the petitioners would not at all be justified. Accordingly petitioner shall be released

Section 69 and 132 of the CGST Act, 2017 – Bail – Arrest -- The petitioner sought directions to declare section 132(1)(b) and (c) of the Act, 2017 as unconstitutional; for a declaration that power under section 69 can be exercised only upon determination of liability; and enlarging the petitioners on bail. The petitioners were arrested on 16.02.2021 under section 69 of the Act. The allegations against the two petitioners is that they have availed ineligible ITC to the extent of Rs. 9,04,89,054/- by using fake invoices i.e without actual supply of goods or services. The petitioner’s counsel submitted that they had cooperated with the investigation and had paid Rs. 4,80,58,988/- i.e. more than 50% of the alleged dues. The maximum penalty for committing an offence under section 132(1)(b) and (c) is five years with fine. Since the maximum sentence is less than seven years, judgment of the Supreme Court in Arnesh Kumar Vs. State of Bihar (2014) 8 SCC 273 would be applicable. The respondent counsel opposing the bail submitted that petitioners may tamper with the documents and influence the witnesses. The court observed that no instance of the tampering with documents or trying to influence any witness being brought on record. In the remand application, the prayer made by the arresting authority is for remand to JC for 60 days though in the penultimate paragraph, this was overwritten to 14 days but without initials. This only indicates the manner in which the respondents have proceeded in the matter. The petitioners have paid Rs. 50% of the alleged dues and they have made a statement that they would be bound to pay whatever amount is found due and payable upon investigation subject to their right of appeal. The Respondents have also not filed any complaint before the competent magistrate. A remand application by its very nature cannot be construed to be a first information or a complaint as is understood in law. The petitioners are in detention since 16.02.2021 without any formal accusation. Held that:- The Hon’ble High Court issued notice to the respondents and enlarged the petitioners on bail on executing a personal bond each for an amount of Rs. 50,000/- and furnishing surety of Rs. 5,00,000.00 each and on certain conditions. Listed the matter on 20th April, 2021.
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