Condition of part payment by reversal of alleged fraudulent ITC directed by Trial Court for bail is not illegal: HC

Case Details: Amit Gupta v. Directorate General of GST Intelligence - [2022] 141 taxmann.com 209 (Delhi)

Judiciary and Counsel Details

• • Ms Mukta Gupta, J.
  • Rajesh Jain, Viraj Tiwari & Ramashish, Advs. for the Petitioner.
  • Harpreet Singh, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was arrested by the department and it was alleged that he was mastermind behind devising a mechanism of availing ITC on the strength of bills of various suppliers which were non-existing and fictitious and availed fraudulent ITC worth Rs. 27.05 crores which was further passed on. He filed an application for bail before the Trial Court.

The Trial Court imposed condition of deposit of amount of Rs. 2.70 crores for grant of bail. The petitioner deposited Rs. 1.10 crores through cash ledger and Rs. 1.60 crores by way of debiting/reversals through electronic ITC ledger. The department filed application for cancellation of bail and the Patiala House Court cancelled bail on the ground that condition was not fulfilled as ITC was not paid in cash. He filed writ petition against the same.

High Court Held

The Honorable High Court observed that non-compliance of the conditions of bail is a ground for cancellation of the same. However, in the present case, the condition was to deposit a sum of Rs. 2.70 crores with the department which stands satisfied by the petitioner by depositing part amount by transfer of ITCs. Therefore, it can’t be said that the petitioner failed to fulfil the conditions imposed on him. Thus, the order of cancellation of bail was to be set aside.